On Bankruptcy and Mediation
Well-defined limits (photo by Marilyn Swanson) By Donald L. Swanson The opinion is In re Parking Management, Inc., Case No. 20-15026, in the Maryland Bankruptcy Court (decided August 28, 2020, Doc. 224). The Question The question is whether Debtor has too much debt to qualify for Subchapter V relief. Background —Subchapter V The new Subchapter V... Continue Reading →
Custodians By: Donald L Swanson The case is, In re U.S.A. Parts Supply, Cadillac U.S.A. Oldsmobile U.S.A., L.P., Case No. 20-bk-241, U.S. Bankruptcy Court, Northern West Virginia (decided Aug. 17, 2020, Doc. 143). On March 22, 2020, Debtor files a voluntary Chapter 11 petition under Subchapter V as a small business debtor. Creditors promptly file a... Continue Reading →
An election system and process (photo by Marilyn Swanson) By: Donald L Swanson Wow—didn’t expect to see an § 1111(b) election opinion under Subchapter V this soon! But here it is: In re Body Transit, Inc. d/b/a/ Rascals Fitness, Bky. No. 20-10014 in Eastern Pennsylvania Bankruptcy Court (decided August 7, 2020, by Hon. Eric. L. Frank,... Continue Reading →
The wheels of commerce must continue to turn (photo by Marilyn Swanson) By: Donald L Swanson Under UCC § 9-332, a debtor’s attorney can receive, and keep, pre-petition retainers paid from a lender’s collateral proceeds—absent collusion. That’s the conclusion of a recent Bankruptcy Court opinion in Walters v. Lynch (In re 3P4PL, LLC), Adv. No. 15-1120,... Continue Reading →
A Bed & Breakfast (photo by Marilyn Swanson) By: Donald L Swanson Chapter 11 Debtor owns her home and uses it as a Bed & Breakfast. The mortgage on Debtor's B&B/residence is her primary debt. This raises Subchapter V issues like: Eligibility—is her primary debt a consumer debt or a business debt?Eligibility—is her bankruptcy a "single... Continue Reading →
By: Donald L Swanson Subchapter V exists "to improve the reorganization process for small business chapter 11 debtors." In re Wright, Case No. 20-01035 (Bankry.S.Car., Order dated 4/27/2020, Doc. 37 at 5). Charles Wright (“Debtor”) files a Chapter 11 case on February 28, 2020, designating himself a small business debtor and electing to proceed under Subchapter... Continue Reading →
We have failed to craft a bankruptcy relief that is viable for the needs of today’s entrepreneurs.
By: Donald L Swanson Cash in a business is like blood in a body: without it, you die! A Huge Challenge Cash availability is a huge challenge for family businesses in bankruptcy. Here’s why: Running out of cash is a common symptom of financial stress that leads to bankruptcy; and A bankruptcy filing will magnify that... Continue Reading →
By: Donald L Swanson Five different bankruptcy courts have allowed Subchapter V designations for debtors whose Chapter 11 cases were already existing on the effective date (February 19, 2020) of the Small Business Reorganization Act (“SBRA”). And their opinions are instructive on procedures and legal standards for doing so. These five cases run the gamut of... Continue Reading →
By: Donald L Swanson The CARES Act (“Coronavirus Aid, Relief, and Economic Security Act” ) is now law—and has been since March 27, 2020. Bankruptcy Amendments in CARES Act Sec. 1113 of the CARES Act deals with “Bankruptcy” and contains the following provisions. Eligibility for Small Business Bankruptcy. Total-debts eligibility for the Small Business Reorganization Act... Continue Reading →
