10 www.azbankers.org Guidance for Arizona Banks on the Small Business Reorganization Act of 2019 By Jacob Sparks, Eric Van Horn and Rick Herold, Spencer Fane LLP A S A RESULT OF THE CORONAVIRUS PANDEMIC, ARIZONA BANKS and their borrowers are facing economic uncertainty. Bankruptcy filings are on the rise, and many eligible borrowers are opting to file under the Small Business Reorganization Act of 2019 (SBRA), a new fast-track bankruptcy option that alters lenders ’ and other creditors ’ rights in certain Chapter 11 bankruptcy cases. The SBRA is quickly becoming an important tool for debtors in bankruptcy as the effects of COVID-19 are felt across the country. The SBRA became effective Feb. 2020 and modified traditional Chapter 11 practices and procedures intending to create a faster, more efficient Chapter 11 process for small business debtors. For example, the SBRA requires debtors to attend a case status conference within 60 days and file a plan within 90 days. Four- teen days before the status conference, debtors are required to file a case status report detailing the debtor's efforts to obtain a consensual plan. Debtors are not required to file a separate dis- closure statement, but the plan must include a brief history of the debtor, a liquidation analysis, and financial projections relating to the debtor ’ s ability to make payments under the proposed plan of reorganization. Shortly after the SBRA became effective, the Coronavirus Aid, Re- lief and Economic Security Act (CARES Act) expanded the SBRA, making it available to more small businesses. Under the original provisions of the SBRA, a small business debtor could not have more than $2,725,625 in non-contingent, liquidated, secured and unsecured debts, excluding debts owed to affiliates or insiders. The CARES Act, signed into law by President Trump March 27, 2020, temporarily (effective for only one year) expands the debt cap to $7,500,000, increasing the number of debtors who will utilize the debtor-friendly SBRA.