Sen. Chuck Grassley (R-IA), who authored recently signed legislation designed to streamline existing debt reorganization procedures, is touting the benefits of the measure.
The Small Business Reorganization Act, which has been signed by President Donald Trump, also reduces certain small business bankruptcy requirements intended for major corporations.
“American businesses come in all shapes and sizes,” Grassley said. “It’s time that the bankruptcy code reflect this reality. Mom and pop shops shouldn’t face the same debt reorganization challenges as major companies with armies of accountants. The Small Business Reorganization Act takes into account the unique needs of small businesses and streamlines existing reorganization processes. A well-functioning bankruptcy system, specifically for small businesses, allows businesses to reorganize, preserve jobs, maximize the value of assets, and ensure the proper allocation of resources.”
Grassley said, by signing the bill, Trump is making good on his promise to promote American small businesses.
Chapter 11 in the bankruptcy code was designed for administering complex business reorganizations involving multi-million dollar companies, acknowledging although several provisions specifically focus on small business debtors, a significant amount of research shows that Chapter 11 may still create difficulties for small businesses, including high costs, deficits, and procedural roadblocks.
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