Legis Daily

Small Business Reorganization Act of 2019

USA116th CongressHR-3311| House 
| Updated: 8/23/2019
Ben Cline

Ben Cline

Republican Representative

Virginia

Cosponsors (3)
David N. Cicilline (Democratic)Steve Cohen (Democratic)Doug Collins (Republican)

Administrative State, Regulatory Reform, and Antitrust Subcommittee, Judiciary Committee

  • Introduced
  • In Committee
  • On Floor
  • Passed Chamber
  • Enacted
Small Business Reorganization Act of 2019 This bill creates new bankruptcy procedures for small businesses filing for reorganization under Chapter 11 and otherwise revises provisions related to venue and trustee responsibilities in Chapter 11 bankruptcies. (Sec. 2) The bill provides for the appointment of a trustee for a small business debtor filing under these new procedures. The trustee must assist in developing a reorganization plan, account for the property of the debtor, attend certain hearings and conferences, and ensure that the debtor complies with payments required under the plan. As under current law, a debtor may operate their business as a debtor in possession during the reorganization. The bill sets forth the rights and powers of a debtor in possession, as well as the procedures for removing a debtor in possession. The bill provides reporting requirements for debtors and reduces the amount of disclosures required by debtors under current law. Under these new procedures, only a debtor is allowed to file a reorganization plan. Currently, creditors may also submit plans for court approval for small businesses filing under Chapter 11. The bill sets forth requirements regarding the filing and contents of a plan of reorganization. A debtor must submit all or a portion of future income to the trustee as needed to execute the plan. The bill provides authority to the bankruptcy court to approve a reorganization plan for small businesses over the objections of the creditors. However, the plan may not discriminate unfairly, and must be fair and equitable towards each class of claims or interests that is impaired under, and has not accepted, the plan. Currently, creditors must generally vote to approve such a plan. Under a fair and equitable plan as established by this bill, a debtor's projected disposable income for at least three years, but no longer than five, must go towards payments under the plan. (Sec. 3) The bill also provides additional standards a trustee must meet in order to void a preferential transfer for all Chapter 11 filers. (Preferential transfers generally occur when a debtor transfers property before filing bankruptcy that is beneficial to one creditor to the detriment of others.) Specifically, a trustee may only void such a transfer based on reasonable due diligence and must take into account a party's known or reasonably knowable affirmative defenses. The bill also revises venue criteria for proceedings connected with a Chapter 11 bankruptcy case. Currently, an action to recover a debt against a noninsider (i.e., those that are not relatives, general partners, and directors or officers of the debtor) of less than $13,650 must be brought in the district court where the defendant resides. The bill increases that amount to $25,000. (Sec. 5) This bill takes effect 180 days after enactment.

Bill Text Versions

View Text
6 versions available

Suggested Questions

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Timeline
Apr 9, 2019

Latest Companion Bill Action

S 116-1091
Introduced in Senate
Jun 18, 2019
Introduced in House
Jun 18, 2019
Referred to the House Committee on the Judiciary.
Jun 28, 2019
Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.
Jul 11, 2019
Committee Consideration and Mark-up Session Held.
Jul 11, 2019
Ordered to be Reported by Voice Vote.
Jul 23, 2019
Placed on the Union Calendar, Calendar No. 131.
Jul 23, 2019
Reported by the Committee on Judiciary. H. Rept. 116-171.
Jul 23, 2019
Mr. Cicilline moved to suspend the rules and pass the bill, as amended.
Jul 23, 2019
Considered under suspension of the rules. (consideration: CR H7217-7220)
Jul 23, 2019
DEBATE - The House proceeded with forty minutes of debate on H.R. 3311.
Jul 23, 2019
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H7217-7219)
Jul 23, 2019
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H7217-7219)
Jul 23, 2019
Motion to reconsider laid on the table Agreed to without objection.
Jul 24, 2019
Received in the Senate, read twice.
Aug 1, 2019
Passed Senate without amendment by Voice Vote. (consideration: CR S5321)
Aug 1, 2019
Passed/agreed to in Senate: Passed Senate without amendment by Voice Vote.(consideration: CR S5321)
Aug 1, 2019
Message on Senate action sent to the House.
Aug 13, 2019
Presented to President.
Aug 23, 2019
Signed by President.
Aug 23, 2019
Became Public Law No: 116-54.
  • April 9, 2019

    Latest Companion Bill Action

    S 116-1091
    Introduced in Senate


  • June 18, 2019
    Introduced in House


  • June 18, 2019
    Referred to the House Committee on the Judiciary.


  • June 28, 2019
    Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.


  • July 11, 2019
    Committee Consideration and Mark-up Session Held.


  • July 11, 2019
    Ordered to be Reported by Voice Vote.


  • July 23, 2019
    Placed on the Union Calendar, Calendar No. 131.


  • July 23, 2019
    Reported by the Committee on Judiciary. H. Rept. 116-171.


  • July 23, 2019
    Mr. Cicilline moved to suspend the rules and pass the bill, as amended.


  • July 23, 2019
    Considered under suspension of the rules. (consideration: CR H7217-7220)


  • July 23, 2019
    DEBATE - The House proceeded with forty minutes of debate on H.R. 3311.


  • July 23, 2019
    Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H7217-7219)


  • July 23, 2019
    On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H7217-7219)


  • July 23, 2019
    Motion to reconsider laid on the table Agreed to without objection.


  • July 24, 2019
    Received in the Senate, read twice.


  • August 1, 2019
    Passed Senate without amendment by Voice Vote. (consideration: CR S5321)


  • August 1, 2019
    Passed/agreed to in Senate: Passed Senate without amendment by Voice Vote.(consideration: CR S5321)


  • August 1, 2019
    Message on Senate action sent to the House.


  • August 13, 2019
    Presented to President.


  • August 23, 2019
    Signed by President.


  • August 23, 2019
    Became Public Law No: 116-54.

Finance and Financial Sector

Related Bills

  • S 116-1091: Small Business Reorganization Act of 2019
BankruptcyCorporate finance and managementJurisdiction and venueSmall business

Small Business Reorganization Act of 2019

USA116th CongressHR-3311| House 
| Updated: 8/23/2019
Small Business Reorganization Act of 2019 This bill creates new bankruptcy procedures for small businesses filing for reorganization under Chapter 11 and otherwise revises provisions related to venue and trustee responsibilities in Chapter 11 bankruptcies. (Sec. 2) The bill provides for the appointment of a trustee for a small business debtor filing under these new procedures. The trustee must assist in developing a reorganization plan, account for the property of the debtor, attend certain hearings and conferences, and ensure that the debtor complies with payments required under the plan. As under current law, a debtor may operate their business as a debtor in possession during the reorganization. The bill sets forth the rights and powers of a debtor in possession, as well as the procedures for removing a debtor in possession. The bill provides reporting requirements for debtors and reduces the amount of disclosures required by debtors under current law. Under these new procedures, only a debtor is allowed to file a reorganization plan. Currently, creditors may also submit plans for court approval for small businesses filing under Chapter 11. The bill sets forth requirements regarding the filing and contents of a plan of reorganization. A debtor must submit all or a portion of future income to the trustee as needed to execute the plan. The bill provides authority to the bankruptcy court to approve a reorganization plan for small businesses over the objections of the creditors. However, the plan may not discriminate unfairly, and must be fair and equitable towards each class of claims or interests that is impaired under, and has not accepted, the plan. Currently, creditors must generally vote to approve such a plan. Under a fair and equitable plan as established by this bill, a debtor's projected disposable income for at least three years, but no longer than five, must go towards payments under the plan. (Sec. 3) The bill also provides additional standards a trustee must meet in order to void a preferential transfer for all Chapter 11 filers. (Preferential transfers generally occur when a debtor transfers property before filing bankruptcy that is beneficial to one creditor to the detriment of others.) Specifically, a trustee may only void such a transfer based on reasonable due diligence and must take into account a party's known or reasonably knowable affirmative defenses. The bill also revises venue criteria for proceedings connected with a Chapter 11 bankruptcy case. Currently, an action to recover a debt against a noninsider (i.e., those that are not relatives, general partners, and directors or officers of the debtor) of less than $13,650 must be brought in the district court where the defendant resides. The bill increases that amount to $25,000. (Sec. 5) This bill takes effect 180 days after enactment.

Bill Text Versions

View Text
6 versions available

Suggested Questions

Get AI-generated questions to help you understand this bill better

Timeline
Apr 9, 2019

Latest Companion Bill Action

S 116-1091
Introduced in Senate
Jun 18, 2019
Introduced in House
Jun 18, 2019
Referred to the House Committee on the Judiciary.
Jun 28, 2019
Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.
Jul 11, 2019
Committee Consideration and Mark-up Session Held.
Jul 11, 2019
Ordered to be Reported by Voice Vote.
Jul 23, 2019
Placed on the Union Calendar, Calendar No. 131.
Jul 23, 2019
Reported by the Committee on Judiciary. H. Rept. 116-171.
Jul 23, 2019
Mr. Cicilline moved to suspend the rules and pass the bill, as amended.
Jul 23, 2019
Considered under suspension of the rules. (consideration: CR H7217-7220)
Jul 23, 2019
DEBATE - The House proceeded with forty minutes of debate on H.R. 3311.
Jul 23, 2019
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H7217-7219)
Jul 23, 2019
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H7217-7219)
Jul 23, 2019
Motion to reconsider laid on the table Agreed to without objection.
Jul 24, 2019
Received in the Senate, read twice.
Aug 1, 2019
Passed Senate without amendment by Voice Vote. (consideration: CR S5321)
Aug 1, 2019
Passed/agreed to in Senate: Passed Senate without amendment by Voice Vote.(consideration: CR S5321)
Aug 1, 2019
Message on Senate action sent to the House.
Aug 13, 2019
Presented to President.
Aug 23, 2019
Signed by President.
Aug 23, 2019
Became Public Law No: 116-54.
  • April 9, 2019

    Latest Companion Bill Action

    S 116-1091
    Introduced in Senate


  • June 18, 2019
    Introduced in House


  • June 18, 2019
    Referred to the House Committee on the Judiciary.


  • June 28, 2019
    Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.


  • July 11, 2019
    Committee Consideration and Mark-up Session Held.


  • July 11, 2019
    Ordered to be Reported by Voice Vote.


  • July 23, 2019
    Placed on the Union Calendar, Calendar No. 131.


  • July 23, 2019
    Reported by the Committee on Judiciary. H. Rept. 116-171.


  • July 23, 2019
    Mr. Cicilline moved to suspend the rules and pass the bill, as amended.


  • July 23, 2019
    Considered under suspension of the rules. (consideration: CR H7217-7220)


  • July 23, 2019
    DEBATE - The House proceeded with forty minutes of debate on H.R. 3311.


  • July 23, 2019
    Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H7217-7219)


  • July 23, 2019
    On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H7217-7219)


  • July 23, 2019
    Motion to reconsider laid on the table Agreed to without objection.


  • July 24, 2019
    Received in the Senate, read twice.


  • August 1, 2019
    Passed Senate without amendment by Voice Vote. (consideration: CR S5321)


  • August 1, 2019
    Passed/agreed to in Senate: Passed Senate without amendment by Voice Vote.(consideration: CR S5321)


  • August 1, 2019
    Message on Senate action sent to the House.


  • August 13, 2019
    Presented to President.


  • August 23, 2019
    Signed by President.


  • August 23, 2019
    Became Public Law No: 116-54.
Ben Cline

Ben Cline

Republican Representative

Virginia

Cosponsors (3)
David N. Cicilline (Democratic)Steve Cohen (Democratic)Doug Collins (Republican)

Administrative State, Regulatory Reform, and Antitrust Subcommittee, Judiciary Committee

Finance and Financial Sector

Related Bills

  • S 116-1091: Small Business Reorganization Act of 2019
  • Introduced
  • In Committee
  • On Floor
  • Passed Chamber
  • Enacted
BankruptcyCorporate finance and managementJurisdiction and venueSmall business