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ABI Launches Website for Subchapter V Professionals

August 13, 2024, 07:22 AM
Filed Under: Bankruptcy

As part of its continuing study of Subchapter V of the Bankruptcy Code, ABI launched a website for professionals to share their experiences about the real-world impact of Subchapter V in helping small businesses reorganize and helping their creditors get paid. The site, available at https://abi.org/subvstories, allows professionals to share videos and written accounts about their experiences with distressed small businesses or creditors who have used or benefited from the subchapter.

Subchapter V originally went into effect on February 19, 2020, to provide a more streamlined path for distressed small businesses to restructure their debts. Although it launched with a debt eligibility limit of $2,725,625, Congress increased the Subchapter V debt eligibility limit to $7.5 million through the CARES Act in March 2020. Congress subsequently extended the higher debt eligibility limit twice, but, despite legislative efforts to extend it further, the limit reset on June 21, 2024, to $3,024,725 due to a statutory sunset.

Researching Subchapter V’s effectiveness and providing data on small business restructuring was the primary mission of ABI’s Subchapter V Task Force when it was launched in April 2023. Over the course of nearly a year, the Task Force held public hearings, reviewed studies and examined data on Subchapter V. The Task Force’s Final Report, released in April 2024, supported making the $7.5 million debt limit permanent for Subchapter V, finding that the higher debt eligibility limit enabled more small businesses to quickly restructure, costs were lower than in other types of bankruptcy cases, and creditors received more money.







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