CBH Client First in Michigan to Receive Small Business Bankruptcy Confirmation
On September 28, 2020, CBH’s, client Purple East Plus, Inc. (“Purple East”) became the first small business in the State of Michigan to have a plan of reorganization confirmed under the newly enacted Small Business Reorganization Act (“SBRA”), 11 U.S.C. § 1181 et seq. The SBRA was signed into law on August 23, 2019 and went into effect on February 19, 2020. The SBRA is intended to provide an accessible strategy of reorganization for small businesses under the Bankruptcy Code. Traditionally, Chapter 11 reorganizations were only available to multinational corporations due to the high costs and arduous road to reorganization that Chapter 11’s presented. The SBRA, however, aims to provide an affordable and streamlined business reorganization bankruptcy by eliminating many of the administrative hurdles that exist in traditional Chapter 11’s.
By filing a Chapter 11 bankruptcy as a small business under the SBRA, Purple East was able to survive the economic downturn caused by COVID-19, ward off aggressive creditors, and retain control of its operations. The business, a Grand Rapids retail shop since 1974 that is known for its promotion of art, music, and culture, utilized the SBRA to reduce its operations from four stores down to one, terminate its leases and other contracts, eliminate much of its unsecured debt, propose a payment plan for creditors, and create a plan of reorganization for a successful future. The business is the first small business in the State of Michigan to have a plan confirmed under the SBRA. In the end, CBH attorneys Steven M. Bylenga and Andrew R. McInnis helped Purple East utilize the tools provided by the SBRA to save its business.
If your small business has experienced financial hardships in the wake of the COVID-19 pandemic, contact our office at 616.608.3061 or through our website’s contact page to learn how to reorganize your debts and eliminate your stress.
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