On Bankruptcy and Mediation
A first day? (photo by Marilyn Swanson) By: Donald L Swanson Here is a Hard-Knocks Rule (i.e., a lesson I’ve learned the hard way): A plan of reorganization needs to be a first-day filing—or as close to that as possible. This lesson first imposed itself upon me three decades ago. I’m representing a Chapter 11 debtor,... Continue Reading →
11 U.S.C. Sec. 330(a)(1)(a) By: Donald L Swanson Question: May a Subchapter V trustee utilize the services of a paralegal employed by the trustee’s law firm: without a separate application for approval of the paralegal’s employment; andwith the paralegal’s services being compensated as part of the Subchapter V trustee's fee application under § 330(a)(1)? Answer: The... Continue Reading →
By: Donald L Swanson Question: Should a Subchapter V trustee be receiving and disbursing the debtor’s payments to creditors? Answer: No—absent highly unusual circumstances. Rationale Here are the reasons for the negative answer. --First A Subchapter V trustee’s compensation is based on hourly services rendered—not on a percentage of money the trustee handles. See this linked... Continue Reading →
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 →
Co-existing, side-by-side (photo by Marilyn Swanson) By: Donald L Swanson A little-known effect of the enactment of Subchapter V is this: Prior “small business debtor” rules now co-exist, side-by-side, with (and separately from) Subchapter V rules in Chapter 11; andWe have two separate-but-similar systems for small business debtors. A Chronology Consider this chronology of changes that... Continue Reading →
By: Donald L Swanson So . . . the second, bi-partisan pandemic bill has made its way through both houses of Congress. It has been approved by politicians in both parties. It is signed by the President and is now law. Here is a link to the text of the bi-partisan law. It’s called the "Coronavirus... Continue Reading →
An early end By: Donald L Swanson “The term of a Subchapter V plan can be less than three years, based upon the language of the statute!” --A Bankruptcy Judge's comment at a bankruptcy conference in December 2019 (as I recall it). Upon hearing that comment, I went scrambling to find the statutory language. And here... Continue Reading →
By: Donald L Swanson Subchapter V trustee compensation is based on an hourly fee. Unlike compensation for a Chapter 7, Chapter 12 or Chapter 13 trustee, a Subchapter V trustee’s compensation has nothing to do with the amount of funds disbursed. That’s the conclusion of a Bankruptcy Court opinion: In re Tri-State Roofing, Case No. 20-40188,... Continue Reading →
By: Donald L Swanson It happens. There are businesses in financial stress who, for a variety of reasons, can’t qualify for Subchapter V. Owners want to save the business, but Subchapter V is not available. Reasons why Subchapter V might be unavailable include: Debtor has more than $7.5 million of qualifying debt and can’t get enough... Continue Reading →
A permanent extender? (photo by Marilyn Swanson) By: Donald L. Swanson The Small Business Reorganization Act of 2019 (aka “Subchapter V”) has been in effect since February 19, 2020. And here’s something we’ve learned since then: Subchapter V meets a definite need in our society for helping small businesses and owners in financial stress. I’ve seen... Continue Reading →
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