Small Business Bankruptcy Law Rolls Out With New Trustees

The Justice Department’s bankruptcy monitoring program has some 250 new trustees at the ready to assist with small business cases as a change in bankruptcy law intended to make it easier for smaller companies to reorganize goes into effect.

The Small Business Reorganization Act of 2019, signed into law in August, adds a subchapter to the bankruptcy code’s Chapter 11 to cut the legal costs incurred by qualifying small corporate debtors, defined as those with about $2.7 million of debt or less. It also expedites the restructuring process and allows owners of the bankrupt company to retain a stake.

The ...