On Bankruptcy and Mediation
An early end By Donald L. Swanson A Subchapter V trustee has various duties established by statute (see 11 U.S.C. § 1183(b)). Such duties are substantial and important, but most are concluded upon confirmation of a Subchapter V plan. Administrative Expense—Early Termination Savings Of necessity, a Subchapter V trustee’s performance of statutory duties creates an... Continue Reading →
Utilizing and gaining experience from another (photo by Marilyn Swanson) By: Donald L Swanson It’s been a while—quite a long while, actually—since bankruptcy cases were booming. A Problem The result of such time lag is this: younger attorneys have missed-out on opportunities to grow in the bankruptcy realm; andthe bankruptcy bar is aging, without adequate development... Continue Reading →
Opposing views (photo by Marilyn Swanson) By: Donald L Swanson To be eligible for Subchapter V relief, the debtor must be “a person engaged in commercial or business activities” (§ 1182(1)(a)). Opposing Views Opposing views are developing on how this “engaged in” criterion should be applied. One view says, (i) nothing requires a debtor to be... Continue Reading →
Removed (photo by Marilyn Swanson) By: Donald L Swanson When a Subchapter V debtor is removed from possession, the Subchapter V trustee steps into the possession role. That’s according to statute. Statutes Here are the statutory provisions (emphasis added): 11 U.S.C. § 1182(2) is titled, “Debtor in Possession” and says, “The term ‘debtor in possession’ means... Continue Reading →
COVID-19 Bankruptcy Relief Extension Act of 2021 By: Donald L Swanson It's finally happened -- on bi-partisan and nearly-unanimous votes. The $7.5 million debt limit for Subchapter V eligibility, set to expire on March 27, 2021, is extended. Yet, it took a March 2021 fire drill to do so (see this webpage), which fire drill concluded... Continue Reading →
Timing (photo by Marilyn Swanson) By Donald L. Swanson Here are opposing Subchapter V discharge rules—based on whether the plan is confirmed consensually or non-consensually: Consensual Confirmation. “If a plan is consensual and confirmed under Section 1191(a), the debtor receives a discharge under Section 1141(d)”; butNon-Consensual Confirmation. If a plan is non-consensual and confirmed under Section... Continue Reading →
By: Donald L Swanson A family business in Chapter 11 (whether in Subchapter V or a regular Chapter 11) has one task that stands above all others in importance. It’s this: The business must generate a positive cash flow. The Lawyer’s Impossible Task All the favorable bankruptcy rules that exist, and all the favorable bankruptcy court... Continue Reading →
A first day? (photo by Marilyn Swanson) By: Donald L Swanson Here is a Hard-Knocks Rule (i.e., a lesson I’ve learned the hard way): A plan of reorganization needs to be a first-day filing—or as close to that as possible. This lesson first imposed itself upon me three decades ago. I’m representing a Chapter 11 debtor,... Continue Reading →
Not eligible for roaming the prairie (photo by Marilyn Swanson) By: Donald L Swanson QUIZ – Multiple Choice Question Question: Where is this bankruptcy eligibility language found: “aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not... Continue Reading →
Co-existing, side-by-side (photo by Marilyn Swanson) By: Donald L Swanson A little-known effect of the enactment of Subchapter V is this: Prior “small business debtor” rules now co-exist, side-by-side, with (and separately from) Subchapter V rules in Chapter 11; andWe have two separate-but-similar systems for small business debtors. A Chronology Consider this chronology of changes that... Continue Reading →
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