For banks and financial institutions, navigating bankruptcy proceedings is a critical part of managing credit risk — especially when dealing with small business borrowers. Subchapter V of Chapter 11, introduced under the Small Business Reorganization Act, offers a streamlined path for debtor reorganization but limits certain rights traditionally held by secured lenders. Understanding how these changes impact loan recovery strategies, collateral protection, and guarantor enforcement is essential for banks seeking to protect their interests in a post-default environment.

Continue reading >