Subchapter V Trustee: Initial And Subsequent Zoom Meetings–A Facilitation Tool

A Vise-Grip Tool 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). That’s what we Subchapter V trustees are supposed to do. Ok, fine.  But how are we supposed to do that? A facilitation tool that many Subchapter V trustees... Continue Reading →

Two Subchapter V Plan Confirmation Standards: (i) Chapter 7 Liquidation, & (ii) Unfair Discrimination (In re Lapeer Aviation)

Two different standards? (Photo by Marilyn Swanson) By: Donald L Swanson Every now and then we get an example of how a process should work. That’s exactly what we have, regarding confirmation of a contested Subchapter V plan, in the case of In re Lapeer Aviation, Inc., Case No. 21-31500 in the Eastern Michigan Bankruptcy Court.... Continue Reading →

Subchapter V Trustee’s Right To “Appear And Be Heard”: Duties v. Powers

Appearing and being heard? (Photo by Marilyn Swanson) By: Donald L Swanson Back in Subchapter V’s early days, I’m serving as Trustee in a Subchapter V case.  In that case: One of the parties files a motion, to which I file a written response.  The motion has nothing to do with any of the four topics... Continue Reading →

Fighting To Get Into Subchapter V (In re Ventura)

Persistence through adversity (photo by Marilyn Swanson) By: Donald L Swanson You’ve gotta admire the Debtor in In re Deirdre Ventura. Debtor has been fighting to save a Bed and Breakfast business through bankruptcy: beginning in 2018 with a regular Chapter 11, and then struggling to get into Subchapter V. Debtor's is a you-can’t-make-this-stuff-up story of... Continue Reading →

Becoming Eligible For Subchapter V By A Retroactive Change In the New Law (In re Phenomenon)

Making adjustments? By: Donald L Swanson On June 21, 2022, Congress and the President (i) extend the $7.5 million debt limit for Subchapter V eligibility, and (ii) adjust other Subchapter V rules.[Fn. 1] One of the adjustments is this: formerly, an “affiliate” of any corporation did not qualify for Subchapter V; but now, only an “affiliate”... Continue Reading →

InfoWars and Subchapter V Eligibility—Again (In re Free Speech Systems)

Wading in—again (photo by Marilyn Swanson) By: Donald L Swanson Three InfoWars entities file voluntary bankruptcy on April 17, 2022, under Subchapter V of Chapter 11.[Fn.1]  And a storm of controversy immediately erupts on whether the three entities actually qualify for Subchapter V relief. On June 10, 2022, the Bankruptcy Court enters an “Agreed Order Dismissing... Continue Reading →

Subchapter V Discharge And § 523(a): A Footnote 2 Problem (Cantwell v. Cleary)

The same . . . or different? (photo by Marilyn Swanson) By: Donald L Swanson “2 There is one inconsequential difference — § 1228(a) refers to debt ‘of a kind specified,’ while § 1192(2) refers to debt ‘of the kind specified.’” [Fn. 1] This "inconsequential difference" quotation, from footnote 2 in the Fourth Circuit’s Cantwell v.... Continue Reading →

Subchapter V’s $7.5 Million Debt Limit Is Renewed: With Bells & Whistles!

Renewal (photo by Marilyn Swanson) By: Donald L Swanson Congress and the President finally extend the $7.5 million debt limit for Subchapter V eligibility: by “unanimous consent” in the Senate;by a vote of 392 – 21 in the House; andsigned by the President on June 21, 2022. A legislative history of the new law is at... Continue Reading →

What’s Needed For Subchapter V ”Engaged In” Eligibility? Not Much—Not Even A Profit Motive (RS Air)

Engaged in commercial or business activity? (Photo by Marilyn Swanson) By: Donald L Swanson Subchapter V has an “engaged in commercial or business activities” criterion for eligibility. Court opinions applying such criterion appear to be trending in this direction: what’s required is “not much.” A new appellate opinion demonstrating this trend is In re RS AIR, LLC,... Continue Reading →

What Does ”Affiliate Of An Issuer” Mean For Subchapter V Ineligibility? (In re Phenomenon)

Affiliates? (Photo by Marilyn Swanson) By: Donald L Swanson What the heck does this mean: “(1) Debtor.—The term ‘debtor’— . . . (B) does not include— . . . (Iii) any debtor that is an affiliate of an issuer, as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c)”    —from Subchapter V’s... Continue Reading →

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