On Bankruptcy and Mediation
Before the sun sets (photo by Marilyn Swanson) By: Donald L. Swanson On July 31, 2025, Senators Grassley (R) and Durbin (D) introduce in the U.S. Senate an amendment (S.A.3382) to the “National Defense Authorization Act for Fiscal Year 2026” (S.2296). Said amendment proposes to reinstate the debt limit for Subchapter V eligibility at $7,500,000,... Continue Reading →
“commercial or business activities”? (Photo by Marilyn Swanson) By: Donald L Swanson “We now hold that a not-for-profit company can be ‘engaged in commercial or business activities’ as that phrase is used" in Subchapter V of the Bankruptcy Code. Guan v. Ellingsworth Residential Community Association, Inc., 125 F.4th 1365 (11th Cir. 2025). Guan is a homeowner... Continue Reading →
Corporations doing business here (photo by Marilyn Swanson) By: Donald L Swanson “[T]his Court finds that the exceptions to discharge under §523(a) only apply to individuals in Subchapter V.” Spring, et al. v. Davidson and Blok Industries, Inc. (In re Davidson; In re Blok Industries, Inc.; Jointly Administered), Adv. No. 23-3005, Doc. 87, at 15 (Bankr.,... Continue Reading →
A path (photo by Marilyn Swanson) By: Donald L Swanson A recent Bankruptcy Court opinion grants an involuntary Debtor’s motion to convert its Chapter 7 case to Subchapter V—relying on a U.S. Supreme Court opinion. This Bankruptcy Court opinion provides a path for others to follow. The opinion is In re Zarifian Enterprises LLC, Case No.... Continue Reading →
Which to choose? (Photo by Marilyn Swanson) By: Donald L Swanson Chapter 12 is for farmers. Subchapter V is for main street businesses. But in many circumstances, a farmer could be eligible for relief under both Chapter 12 and Subchapter V. In such circumstances, the question is this: Which should the farmer choose—Chapter 12 or Subchapter... Continue Reading →
By: Donald L Swanson “A discharge under section 727, 1141, 1192 [Subchapter V], 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— . . .” 11 U.S.C. § 523(a) (emphasis added). Bankruptcy courts applying the foregoing language in the early days of Subchapter V found such language to be clear and... Continue Reading →
A "Silent" Participant? (Photo by Marilyn Swanson) By: Donald L Swanson A “silent” creditor in Subchapter V is one who does not vote on the debtor’s plan and does not object to that plan. The “silent” creditor is a problem for Subchapter V cases. The Problem Here’s the problem: Subchapter V plans are prevented from being... Continue Reading →
Expired (Photo by Marilyn Swanson) By: Donald L Swanson The continuing effort in Congress to extend Subchapter V’s $7.5 million debt limit recently hit a snag. The result: the $7.5 million debt limit for Subchapter V eligibility expired on June 21, 2024, and the Subchapter V debt limit is now reduced to an inflation-adjusted $3,024,725.[i] The... Continue Reading →
Compensation for late service? (Photo of a famous painting) By: Donald L Swanson Debtor’s Chapter 11 counsel cannot be compensated for services performed after a trustee is appointed and the debtor removed from possession. That’s the rule of law in the Fifth Circuit and in a not-for-publication decision of the Ninth Circuit’s Bankruptcy Appellate Panel, based... Continue Reading →
Apathy? (Photo by Marilyn Swanson) By: Donald L Swanson Here’s the latest opinion on a controversial question: In re Franco’s Paving LLC, Case No. 23-20069, Southern Texas Bankruptcy Court, (decided 10/5/2023; Doc. 74). The Question & Answer Voter apathy is a problem in Subchapter V cases. That apathy is in the form of creditors failing or... Continue Reading →
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