Working Together: A Previously Successful Business’s General Counsel and Distressed-Debt Counsel

Working together? (photo by Grant Swanson) By: Donald L Swanson Answers to these two questions can get tricky: When should a previously successful business engage distress-debt counsel? What is the role of the business’s general counsel once that happens? Second Question: Role Here’s the answer to the second question first:  The business’s general counsel needs to... Continue Reading →

An Example Of Subchapter V Accomplishing Its Purpose (In re Chip’s)

A special purpose: gas mask for a WWI horse By: Donald L Swanson It’s great to see a bankruptcy process that works—i.e., where both the debtor and its creditors are on board with a course of bankruptcy action. An excellent and recent example of such a thing involves a PPP loan, in which Debtor: dismisses its... Continue Reading →

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: 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 →

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 →

Automatic Stay: Does Not Exist For Small Business Cases Dismissed And Refiled in Two Years (In re Abundant)

Normal activity cannot exist (photo by Marilyn Swanson) By: Donald L Swanson The automatic bankruptcy stay: “does not apply in a case in which the debtor— . . . (B) was a debtor in a small business case that was dismissed for any reason by an order that became final in the 2-year period” before the... Continue Reading →

Subchapter V’s $7.5 Million Debt Limit Is Extended (But Only For A Year!!)

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 →

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