Historical Prejudices Against Formerly-Successful Entrepreneurs Remain (In re Offer Space)

A link to the past (photo by Marilyn Swanson) By: Donald L Swanson Formerly-successful entrepreneurs have always been treated harshly in these United States. That may be hard to believe, given our market and credit economy and the importance of small businesses to it.  But it’s true. And prejudices against formerly-successful entrepreneurs remain in today’s bankruptcy statutes.... Continue Reading →

Subchapter V: A New Sale-of-Business Opportunity

New business opportunity (cleanup) arises from a failure (photo by Marilyn Swanson) By Donald L. Swanson For many years, Chapter 11 has been nearly-synonymous with sale of a business.  The Old Way But such Chapter 11 sales typically occur under § 363 as pre-confirmation asset sales.  Rarely is there a post-confirmation sale of the ownership interests... Continue Reading →

Subchapter V: Early Termination Of A Trustee’s Services Under A Consensual Plan (§ 1183(c))

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 →

Standards For Fixing The Length OF A Subchapter V Plan, Under § 1191(c)(2)?

Fixed (photo by Marilyn Swanson) By: Donald L Swanson A debtor’s Subchapter V plan must provide for disposable income payments over a “3-year period, or such longer period not to exceed 5 years as the court may fix” (11 U.S.C. § 1191(c)(2), emphasis added). One of the mysteries of Subchapter V is this: what standards should... Continue Reading →

Do § 523(a) Discharge Exceptions Apply To Corporations In Subchapter V? (Better Than Logs & Satellite Restaurants)

An individual -- not an entity (photo by Marilyn Swanson) By: Donald L Swanson Do § 523(a) discharge exceptions apply to non-individual debtors in Subchapter V? That question has been resolved, with opposite results, in two recent opinions by two bankruptcy courts. What follows is a summary of operative statutes and the two opinions. Operative Statutes... Continue Reading →

Surviving A Motion To Convert From Chapter 11 To Chapter 7 — Or Not (In re Gabbidon & In re Neosho)

Surviving some heat (photo by Marilyn Swanson) By: Donald L Swanson There are two bankruptcy court opinions—issued a week apart.  One converts a Chapter 11 case, involuntarily, to a case under Chapter 7.  The Chapter 11 Debtor in the other opinion survives a similar conversion effort—but just barely and due to unique circumstances. A comparison and... Continue Reading →

Lack of Experience — And Filing A Subchapter V Case

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 →

Subchapter V Eligibility: Engaged In “Activities,” Not “Operations” (In re Offer Space)

  Activity (Photo by Marilyn Swanson) By: Donald L Swanson A recent Bankruptcy Court opinion, In re Offer Space, LLC, [fn. 1] adds an important statutory distinction to the “engaged in” criterion analysis for Subchapter V eligibility, under § 1182(1)(A). The distinction is this (emphasis added): § 1182(1)(A) refers to a person “engaged in commercial or... Continue Reading →

Subchapter V Eligibility: “Engaged In” is NOT Modified By “Petition Date”!

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 →

Removing Subchapter V Debtor From Possession And Replacing With Subchapter V Trustee (In re Young)

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 →

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