Perhaps you were riveted by @realDonaldTrump’s live Twitter feeds from the #SocialMediaSummit on Thursday. Or the counter-narrative. Or maybe you tuned out and made cat treats. However you spent the day, it would have been easy to miss the bankruptcy bills that were quietly reported out of Committee for consideration by the House of Representatives.
The House of Representatives has approved the following legislation by voice vote.
The Small Business Reorganization Act (fondly known as the “SBRA”) would add an exciting new Subchapter V to Chapter 11 of the Bankruptcy Code. This new subchapter would provide a streamlined Chapter 11 process for small businesses. “Small” means “very small,” e.g., businesses with less than roughly $2.5 million in liablities.
But wait, there’s more! SBRA would allow small business owners to preserve their ownership interests – avoiding liquidation under a receivership or assignment or pesky new value problems under a traditional Chapter 11. The idea is that, with proper planning and execution (yes, there’s always a catch), a small business can use SBRA to successfully emerge from bankruptcy within several months with a bright, shiny court-approved plan of reorganization. You can read more about it on The National Law Review.
And take heart. Bipartisanship is not yet dead. No. Seriously. SBRA was proposed by Congressman Ben Cline (R-Virginia) and David Cicilline (D-Rhode Island) along with House Judiciary Ranking Member Doug Collins (R-Georgia) and Congressman Steve Cohen (D-Tennessee).
Small businesses are the backbone of our economy, and I want to make sure they have the tools to keep their doors open. The Small Business Reorganization Act would help business owners maintain more control over their life’s work while overcoming difficult times. I appreciate the leadership of Congressmen Cicilline, Cline and Cohen on this important legislation.—Doug Collins
Though Chapter 12 provides special support to family farmers, its $4.1 million debt limit keeps many from using it. The Family Farmer Relief Act of 2019 would allow more family farmers to use the program by raising the debt cap to $10 million.
[This] provides the restructuring and seasonal repayment flexibility that many farmers need in today’s lagging farm economy and will help to align bankruptcy law with the scale and credit needs of U.S. agriculture.Zippy Duval, American Farm Bureau Federation President
This Farm Bureau-supported bill was introduced by Sens. Chuck Grassley (R-Iowa) and cosponsored by Sens. Amy Klobuchar (D-Minn.), Ron Johnson (R-Wis.), Patrick Leahy (D-Vt.), Thom Tillis (R-N.C.), Doug Jones (D-Ala.), Joni Ernst (R-Iowa) and Tina Smith (D-Minn.).
Currently, National Guard members and reservists who serve on active duty are are exempt from the Bankruptcy Code’s means test. This protection is set to expire at the end of the year, but HR 3304 would extend it for an additional 4 years.
Without question, this commonsense measure warrants our support and its prompt consideration by the full House.—Jerry Nadler
The “HAVEN Act” would exclude certain veterans’ disability benefits paid by the Department of Veterans Affairs and the Department of Defense from income under the Bankruptcy Code’s means test. In other words, veterans’ disability would be handled in much the same way as Social Security payments.
This legislation is supported by the National Conference of Bankruptcy Judges, the American Bankruptcy Institute, the National Association of Consumer Bankruptcy Attorneys, and the National Consumer Law Center. It is also supported by the Veterans of Foreign Affairs, the American Legion, and the Disabled American Veterans, among others.
Bankruptcy Venue Reform Act of 2018
Occasionally you ask about the most recent efforts at venue reform. The Bankruptcy Venue Reform Act of 2018 was introduced on January 8, 2018. It was read twice and referred to the Committee on the Judiciary where it is currently gathering electronic dust. You can track its slow progress on Congress.gov.