Judge Thomas B. McNamara of Denver, CO recently widened the door (and the circuit split) as to the types of debtors entitled to seek relief under the Small Business Reorganization Act/Subchapter V of Chapter 11 of the Bankruptcy Code (“SBRA”). To qualify for relief under the SBRA, a debtor must be currently engaged in business at the time of filing. According to Judge McNamara, almost any business will do as long as the debtor is engaged in it at the time of filing, i.e. the debtor need not be currently engaged in the same commercial or business activities that gave rise to the underlying, Subchapter V debts, nor must the debtor be an owner of the business in which the debtor is employed on the filing date.[1]
