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I. INTRODUCTION
The Small Business Reorganization Act of 2019 (the "SBRA"),1 signed by the President on August 23, 2019, enacts a new subchapter V of chapter 11 of the Bankruptcy Code, codified as new 11 U.S.C.1181 - 1195, and makes conforming amendments to several sections of the Bankruptcy Code and statutes dealing with appointment and compensation of trustees in title 28.2 SBRA also revises the definitions of "small business case" and "small business debtor" in 101(5lC) and 101(51D), respectively.3 It took effect on February 19, 2020, 180 days after its enactment. Appendix A is a chart that lists sections of the Bankruptcy Code that SBRA affects and summarizes the changes.
The purpose of SBRA is "to streamline the process by which small bush ness debtors reorganize and rehabilitate their financial affairs."4 A sponsor of the legislation stated that it allows small business debtors "to file bankruptcy in a timely, cost'effective manner, and hopefully allows them to remain in business," which "not only benefits the owners, but employees, suppliers, customers, and others who rely on that business."5
It is likely that SBRA will have a significant impact. A preliminary esti' mate is that approximately 40 percent of chapter 11 debtors in chapter 11 cases filed after October 1, 2007, would qualify as a small business debtor and that about 25 percent of individuals in chapter 11 cases would qualify as a small business.6
New subchapter V applies in cases in which a small business debtor elects its application. In the absence of an election, the existing provisions of chapter 11 that govern a small business debtor apply with one change. SBRA amends 1102(a)(3) to provide that no committee of unsecured credi' tors is appointed in any case of a small business debtor unless the court orders otherwise.7
Subchapter V resembles chapter 12 in some aspects. It provides for a trustee in the case while leaving the debtor in possession of assets and control of the business. The trustee has oversight and monitoring duties and the right to be heard on certain matters. In some cases, the trustee may make disbursements to creditors.
But subchapter V differs from chapter 12 in significant ways. For exam' pie, whereas chapter 12 confirmation standards (1225) are similar to those in...