Tag: Small Business

Reorganizing Family Businesses in Bankruptcy, and the Problem of Creative Destruction—A Chapter 12 Illustration

By: Donald L. Swanson “Creative destruction” occurs when something new kills off whatever existed before it. IPhone Example Just think, for example, of all the creative destruction that the iPhone has wrought! It has destroyed businesses that provided telephones and phone books, cameras and film, audio recordings and players, newspapers and newsstands, and related services. Businesses... Continue Reading →

0

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 →

3

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 →

0

Quiz Question On Debt Limits For Bankruptcy Eligibility

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 →

0

Subchapter V and § 543 “Custodian” Rules (In re U.S.A. Parts Supply)

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 →

0

Moving Old Chapter 11 Cases Into Subchapter V? Bankruptcy Courts Say, “Yes”

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 →

0

CARES Act & Bankruptcy: Congress Wants the Largest of Small Businesses to Liquidate

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 →

0

Stressed Family Businesses: Chapter 11 Reorganization Must Work For Them

By: Donald L. Swanson Family businesses who need to reorganize have a tough go in bankruptcy. There are lots of impediments, both legal (e.g., absolute priority rule) and economic (Chapter 11 is expensive).  The Small Business Reorganization Act of 2019 will help, but it only applies to businesses with less than $2.7 million of debt. An Extraneous... Continue Reading →

0

Small Business Reorganization Act: A Great Law With A Major Flaw

By: Donald L Swanson The Small Business Reorganization Act of 2019 has the following discharge provisions: Plan confirmation “discharges the debtor from” specified debts (see § 1181(c), § 1192 & § 1141(d)(1)(A)); but The discharge takes effect only “after completion” of “all payments due within” the 3 to 5 years term of the plan (§ 1192).... Continue Reading →

2

A CRO-Type Advisory Role for Family Businesses in Financial Stress

By: Donald L Swanson When large businesses are in financial trouble, their banks commonly require them to hire a CRO (a Chief Restructuring Officer) as a condition for extending loans. The CRO can do a variety of things. But one of the essentials is an advisory role: --Evaluate the financial troubles and recommend a course of... Continue Reading →

0

Blog at WordPress.com.

Up ↑

%d bloggers like this: