The Small Business Reorganization Act of 2019 (H.R. 3311) became effective on February 19, 2020. On February 20, 2020, a client of The Congeni Law Firm filed the first Louisiana SBRA case in the United States Bankruptcy Court for the Eastern District of Louisiana in New Orleans. The case involves an overleveraged veterinary clinic with a handful of employees. The business has been serving pet owners in Louisiana’s River Parishes for an extended time, approximately 8 years under current ownership. Absent the provisions of the Act, particularly removal of requirement that equity provide “new value” to retain their equity interest without paying creditors in full and streamlining of the confirmation process, the clinic may have been unable to afford or succeed under chapter 11. Debtor is the type of small business that the Act was meant to help, and Debtor believes it will be able to restructure and maintain on-going operations under the Act.
Posted on
