Bankruptcy Judge Hannah L. Blumenstiel provides an introduction to the Small Business Reorganization Act (SBRA) of 2019, which created subchapter V of chapter 11 of the Bankruptcy Code. Effective since February 2020, the SBRA offers a streamlined, less costly path for small businesses to reorganize under chapter 11. Key features of the Act include subchapter V trustee, no quarterly U.S. Trustee fees, and the debtor retaining possession of its assets. The debt limit had been raised to $7.5 million in light of the COVID-19 pandemic, with at least 50% of debts arising from business activities. (The debt limit has since reset to an adjusted $3,024,725.) The SBRA also allows for limited modification of residential liens and offers permanent exclusivity for debtors to file plans. Tight timelines and specific eligibility criteria are emphasized.
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Hon. Hannah L. Blumenstiel is a U.S. Bankruptcy Judge for the Northern District of California in San Francisco. Prior to her appointment on Feb. 11, 2013, Judge Blumenstiel was an associate (2003-08) and then a partner (2008-12) with Winston & Strawn LLP, where she focused her practice on creditors’ rights litigation in state and federal court, including bankruptcy court. From 2001 to 2003, Judge Blumenstiel was an associate with Murphy Sheneman Julian & Rogers LLP, where she represented debtors, creditors and trustees in bankruptcy cases and adversary proceedings. She served as a law clerk to Hon. Charles M. Caldwell of the U.S. Bankruptcy Court for the Southern District of Ohio (Eastern Division) from 1998 to 2001, and from 1997-98, she represented the State of Ohio’s interests in bankruptcy cases as an assistant attorney general with the Revenue Recovery Section of the Ohio Attorney General’s Office. Judge Blumenstiel is ABI’s Vice President-Research Grants and serves as an Executive Editor of the ABI Journal. She received her J.D. from Capital University Law School in 1997 while working full-time for the Columbus Bar Association as director of its pro bono initiative, “Lawyers for Justice,” and her B.A. from Ohio State University in 1992.
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