Subchapter V Trustees: Satisfying The § 1183(b)(3) Duty To “Appear And Be Heard”

Appearing and being heard? (Photo by Marilyn Swanson) By: Donald L Swanson "The trustee shall . . . appear and be heard at . . . any hearing that concerns . . . the value of property . . . confirmation of a plan . . . sale of property." § 1183(b)(3) (emphasis added). In every... Continue Reading →

Subchapter V Plan: Why Extend The Deadline And Slow The Case?!

Built for speed (photo by Marilyn Swanson) By Donald L. Swanson “Subchapter V is supposed to be a fast process toward plan confirmation, but I don’t see that happening!” --Comment of a Bankruptcy Judge (as I recall the comment) It’s true: (i) Subchapter V is supposed to go quickly, but (ii) it often doesn’t. Here’s why... Continue Reading →

The Setting Of The Sun: Subchapter V Eligibility

SUNSET (photo by Marilyn Swanson) By Donald L. Swanson The sun has set.  Yes it has.  The $7,500,000 eligibility limit for Subchapter V expired yesterday (March 28, 2022), without action by Congress to extend it. Actually, the Subchapter V sun was set to set on March 27—but that’s a Sunday.  So let’s give the benefit of... Continue Reading →

Subchapter V Trustee Duties: Facilitation Conflicts With Other Statutory Duties

Rainbow—a spectrum of light (photo by Marilyn Swanson) By: Donald L Swanson “The [Subchapter V] Trustee shall— . . . facilitate the development of a consensual plan of reorganization.”  11 U.S.C. § 1183(b)(7). Facilitation is a mediator-like tool that can be used by every bankruptcy trustee in every case.  Conflicting Duties For Subchapter V trustees, however,... Continue Reading →

Early Termination of Subchapter V Trustee In Both Consensual & Non-Consensual Plan Confirmations? (§ 1183(c))

  Sec. 1183(c) By: Donald L Swanson There is no doubt about this: after the consensual confirmation of a Subchapter V plan: the trustee’s role terminates upon “substantial consummation” (see § 1183(c)); and“substantial consummation” often occurs shortly after confirmation (see § 1101(2)). The early trustee termination is not merely a possibility, it’s mandatory upon substantial consummation... Continue Reading →

Does A Subchapter V Trustee Have A Duty To “Monitor” Debtor’s Plan Compliance?

Monitoring? (photo by Marilyn Swanson) By: Donald L Swanson Question:  Does a Subchapter V trustee have a duty to “monitor” debtor’s compliance with a confirmed plan? Answer:  “No.” I’ll try to explain . . . and to add a suggestion on what Subchapter V trustees might do, instead. Consensual Confirmation When a plan is confirmed under... Continue Reading →

“Engaged In” Eligibility Struggles: Chapter 12 And Subchapter V (In re Mongeau)

A farming operation? (Photo by Marilyn Swanson) By: Donald L Swanson “Engaged in” eligibility for Chapter 12 (farming operations) and Subchapter V (commercial or business activities) are similar-but-separate things. An opinion by the Kansas Bankruptcy Court shows the difficulty in addressing the “engaged in” eligibility standards in Chapter 12—even when Subchapter V opinions are consulted as... Continue Reading →

A Behind-The-Scenes Role: Subchapter V Trustee Facilitation

Behind the scenes (photo by Marilyn Swanson) By Donald L. Swanson “We can’t see what the Subchapter V trustees are doing, so we don’t have an opinion on their effectiveness.” --This is the response of a couple bankruptcy judges, when asked about the effectiveness of Subchapter V trustees in performing the statutory “facilitate a consensual plan”... Continue Reading →

How To “Fix” A Subchapter V Plan’s Term (In re Urgent Care)

11 U.S.C. Sec. 1191(c)(2) By: Donald L Swanson “The three-year term here is fair and equitable, as it properly balances the risks and rewards for both the debtor and its creditors”; and“the Court declines to fix a longer plan period.” --From a Bankruptcy Court opinion confirming Debtor’s Subchapter V plan—In re Urgent Care Physicians, Ltd, Case... Continue Reading →

Allowing Subchapter V Trustee Fees In A Dismissed Case As “Reasonable” and “Necessary” (In re Besthost)

A reasonable and necessary path (photo by Marilyn Swanson) By: Donald L Swanson A Subchapter V Trustee is entitled to allowance of fees, even when the Subchapter V case is dismissed for lack of authority to file the case. That's the December 16, 2021, ruling in In re Besthost Inn LLC, Case No 21-12158 in the... Continue Reading →

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