A Hotel Does not Meet the Definition of Single Asset Real Estate and may Reorganize Under Subchapter V of Chapter 11 of the Bankruptcy Code

(Excerpt) Enacted via the Small Business Reorganization Act ( SBRA ) in 2019, Subchapter V streamlines the reorganization process, allowing small business debtors to file bankruptcy in a timely and cost-effective manner. The goal behind the legislation is to encourage reorganizations, which will generally result in creditors receiving a higher distribution than in a liquidation and more small businesses surviving. Section 1182(1) of title 11 of the United States Code (the Bankruptcy Code ) limits those who can file a Subchapter V case to a small business debtor who does not own a single asset real estate project ( SARE ). Thus, if the debtor is determined to be a SARE project, the debtor cannot reorganize under Subchapter V. This memorandum explores whether ownership of a single hotel constitutes a SARE project and therefore whether an owner of such hotel is eligible for reorganization under Subchapter V of Chapter 11 of the Bankruptcy Code