The Small Business Restructuring (SBR) and Plan process is designed to offer financially distressed businesses a way to address their debts, with specific timeframes for each step to ensure clarity and efficiency. Here’s a detailed overview:

Eligibility and Appointment:

Businesses with liabilities under $1 million assess insolvency risks and appoint a registered SBR practitioner.

This step is typically initiated as soon as financial distress is recognized.

SBR Practitioner Appointment:

A practitioner is appointed to guide the restructuring process, ideally within days of recognizing the need for restructuring.

Developing the Restructuring Plan (20 Business Days):

The appointed SBR practitioner and the business work together to create a detailed restructuring plan within 20 business days of the practitioner’s appointment. A once off 10 business day extension can be provided if required.

This plan outlines how debts will be repaid and includes financial assessments and projections.

A moratorium on certain creditor actions begins upon the appointment of the SBR practitioner, lasting until the restructuring plan is submitted to creditors, providing critical protection during plan development.

Creditor Review and Voting (15 Business Days):

Creditors are given the restructuring plan and have 15 business days to review and vote on it.

Approval requires a majority by value of voting creditors.

Implementation Phase:

Upon creditor approval, the restructuring plan is put into action under the SBR practitioner’s guidance.

The business begins to make payments according to the plan’s terms.

Completion:

Successful execution of the plan concludes with the business being released from the debts included under the plan.

This phase marks the business’s return to normal operations, free from the constraints of prior financial distress.

Throughout the SBR and Plan process, the emphasis is on swift action and clear timelines, ensuring that businesses have a structured pathway to recover from financial distress while minimizing the impact on operations and relationships with creditors.