The new Subchapter V of Chapter 11 became effective on February 19, 2020. Designed to streamline reorganizations for small businesses, the new Subchapter V has proven very popular. The Final Report of the American Bankruptcy Institute ABI Task Force (the
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The Thompson Coburn blog focuses on legal developments and analysis related to bankruptcy law, particularly emphasizing small business reorganizations under Subchapter V of Chapter 11. It covers topics such as eligibility criteria for Subchapter V filings, treatment of lease obligations in bankruptcy, discharge exceptions for corporate debtors, and significant court rulings affecting bankruptcy procedures and appeals. The blog also addresses broader corporate and commercial law issues, including transactional tools like letters of intent and regulatory updates impacting various practice areas. Content is aimed at providing legal professionals with insights into evolving case law, statutory interpretations, and practical considerations in bankruptcy and corporate legal practice.
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Are Unmatured Lease Obligations Considered Noncontingent Debt for Purposes of Calculating Eligibility to File a Subchapter V Bankruptcy?
Congress passed the Small Business Reorganization Act of 2019 (the “SBRA”) to benefit small businesses. The SBRA established a new framework within Chapter 11 of the Bankruptcy Code, known as subchapter V, which streamlines and simplifies the bankruptcy process for…
Are Subchapter V Corporate Debtors Subject to the §523(a) Exceptions to Discharge?
BackgroundCongress passed The Small Business Reorganization Act of 2019 (the “SBRA”) for small businesses, currently defined as debtors with less than $7.5 million in debt. SBRA created a new Subchapter V, which can be used by both individual debtors or
…
Supreme Court rules section 363(m) limitations on bankruptcy sale appeals not jurisdictional
On April 19, 2023, the U.S. Supreme Court issued its opinion in MOAC Mall Holdings LLC v. Transform Holdco LLC, 598 U.S. (2023), reversing the Second Circuit decision and determining that the limitations on appeals of bankruptcy sale orders provided
…
Put down your fiddle: Third Circuit halts Johnson & Johnson’s Texas two-step
On January 30, 2023, the Third Circuit Court of Appeals dismissed the bankruptcy filing by Johnson & Johnson’s subsidiary, LTL Management, LLC (“LTL”). The Circuit Court reversed the New Jersey Bankruptcy Court and held that LTL did not file the…
A recent decision highlighted a flaw in the Bankruptcy Code. Will the House of Representatives pass the Bankruptcy Threshold Adjustment and Technical Corrections Act to correct it?
By Joseph Orbach & Mark Power
On April 28, 2022, Central District of California Bankruptcy Judge Ernest M. Robles issued a decision regarding the eligibility of a debtor to proceed as a Small Business Debtor under Subchapter V of the Bankruptcy Code. In the decision, Judge…
Chapter 12 family farmer cases in Missouri: An updated look inside the numbers
Agricultural economists have long warned of a looming farm crisis. However, for the most part, they have been wrong. In 2021, nationwide Chapter 12 family farmer bankruptcy filings were at second lowest level since Chapter 12 was enacted in 1987.…
Fracas in the French Quarter: Fifth Circuit weighs in on ongoing leasing controversy over the intersection of Bankruptcy Code Sections 363(f) and 365(h)
Reaching an outcome in line with two other circuit courts, on February 16, 2022 the Fifth Circuit Court of Appeals permitted a Chapter 11 trustee to sell a debtor’s real property free and clear of the leasehold estates held by…
Johnson & Johnson: The Texas two-step and talc-related liabilities
Introduction
A newly created subsidiary of Johnson & Johnson recently filed Chapter 11 to manage 38,000 pending talc-related lawsuits and future talc-related claims. There is nothing especially new about using Chapter 11 to deal with mass tort litigation. In the…
Subchapter V in the Eighth Circuit: The data from the first 18 months
Congress originally conceived the new Subchapter V to “streamline the bankruptcy process by which small business debtors reorganize and rehabilitate their financial affairs.” The new Subchapter became effective on February 19, 2020, and the COVID-19 pandemic began in earnest less…