Important Reminder for Small Businesses Impacted by COVID-19
Updated: Jan 29, 2021
The CARES Act's expanded eligibility for the new Subchapter V Chapter 11 bankruptcy option is scheduled to expire in March 2021. Businesses with aggregate noncontingent liquidated debts that do not exceed $7.5 million are currently eligible for this new streamlined, low-cost process. This amount will drop to $2,725,625 on March 27, 2021 if Congress does not take further action.
For businesses struggling to pay rent, please note that the newly added provisions from the Consolidated Appropriations Act of 2021 provide small business debtors the following:
A 120-day grace period to begin making rent payments;
210 days to make the election to assume or reject a lease; and
The ability to pay post-petition rent arrearage the the life of a plan, rather than prior to confirmation.
These provisions give businesses enough time and safe harbor to reorganize.
Business owners may also wish to read this recent article, which provides an overview of the Subchapter V process and and its possible future: The Small Business Reorganization Act: How it started and where it's going
Please call 727-755-4316 or email us at info@SingletonLegal.com to schedule a consultation if you would like to learn more about the Subchapter V Chapter 11 bankruptcy and whether it may be right for your business.