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A little over one year ago, just as the country was heading
into a period of unprecedented turbulence caused by the COVID-19
pandemic, the Small Business Reorganization Act (SBRA) went into
effect on February 19, 2020. Before SBRA, struggling businesses
considering bankruptcy had two options: Chapter 7 or Chapter
11. SBRA provides an additional option to businesses seeking
to reorganize by adding Subchapter V to the Bankruptcy Code, which
affords small business debtors the option of pursuing Chapter 11
restructuring under laws and rules of (a) traditional
Chapter 11, or (b) Subchapter V.
Bankruptcy law has seen many changes in 2020 and 2021. Some of these were enacted in response to COVID, but many other changes were included in the Bankruptcy Code before the pandemic..
On March 27, 2021, President Biden signed into law the
COVID-19 Bankruptcy Relief Extension Act (the Extension Act). The Extension Act temporarily extends certain COVID-19 bankruptcy relief provisions enacted as part of the
Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), which were further amended and/or extended as part of the
Consolidated Appropriations Act (the CAA). Certain of the amendments included in the CAA and the Extension Act are highlighted below:
Debtors and Paycheck Protection Program Loans
Under the CARES Act, Congress established the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA), whereby businesses may obtain loans that would be forgiven if the borrowers used the funds for certain permitted purposes. The SBA promulgated a rule declaring debtors in bankruptcy ineligible for PPP loans. Debtors across the country have challenged this rule. The CAA attempts to address this issue by expressly authorizi
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Bankruptcy Code Amendments in COVID-19 CARES Act natlawreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from natlawreview.com Daily Mail and Mail on Sunday newspapers.