Stephanie Lieb was quoted in the May 27, 2022 issue of the Tampa Bay Business Journal providing perspective on recent data related to Subchapter V of the bankruptcy code, which was formed to provide a more streamlined and less expensive process for small businesses filing for bankruptcy.
Recent data from the American Bankruptcy Institute (ABI) shows that Florida leads the nation in small businesses filing for bankruptcy. However, Lieb explained that Florida is an outlier related to Subchapter V filings due to the size of businesses in the region and the debt limits required to qualify for Subchapter V proceedings. While the original debt limit was set at $2.7 million, Congress raised that amount to $7.5 million as part of the CARES Act, which allowed more businesses to qualify. However, the increased limit expired as of March 27, 2022, which will likely eliminate the ability for many Florida businesses seeking this beneficial path to bankruptcy protections and reorganization.
“Most small businesses in Florida fall under that $7.5 million threshold,” Lieb said. “It will be interesting to see how many qualify for Subchapter V at the $2.7 million mark. I would guess it’s a lot less.”
The full story is available to subscribers in the May 27 print edition of the Tampa Bay Business Journal, available here on page 4.