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Read MoreThe Small Business Reorganization Act of 2019’s new Subchapter V for small businesses was timely, just one month before COVID-19 turned the economy upside-down. But the value of Sub V’s simplified reorganization process was severely limited by its $2.7 million debt cap.
The CARES Act increased the debt cap to $7.5 million on March 26, 2020. However, this temporary increase expires in late March 2022, when the debt cap will return to $2.7 million.
Given the benefits of Sub V and the pending debt cap reduction:
Debtors with the following characteristics are good candidates for Sub V:
Sub V’s simplified process benefits both lenders and companies. It is more efficient and cost-effective than traditional Chapter 11, thanks to:
J.S. Held’s Strategic Advisory team is equipped to consult on a range of solutions for distressed businesses. For more information on the Small Business Reorganization Act’s Subchapter V, contact Mike Bergthold.
We would like to thank our colleague Mike Bergthold for providing insights and expertise that greatly assisted this research.
Mike Bergthold is a Senior Managing Director in J.S. Held’s Strategic Advisory practice. Mike joined J.S. Held’s Strategic Advisory Group in October of 2024 as part of J.S. Held's acquisition of Stapleton Group. Mike is a highly experienced turnaround executive who simplifies complex problems into actionable plans to drive immediate, measurable, and positive results. He leverages over 30 years of experience advising public and private companies on strategy, finance, and accounting to serve as CRO, financial advisor, interim executive, or strategic board member for companies in financial distress or transition. Mike excels at designing and implementing restructuring strategies, leading capital raises, and negotiating with lenders and investors. He also guides clients through complex legal processes in formal and informal reorganizations. By achieving unity among disparate creditor and investor groups, Mike helps clients renew, recapitalize, and make viable business enterprises.
Mike can be reached at [email protected] or +1 213 404 0113.
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