The New Subchapter V of the Bankruptcy Code: A New Way for Small Businesses to Reorganize

Expired

Program Number

30235

Program Date

2020-10-02

CLE Credits

For many years now, reorganizing under Chapter 11 had been out of reach for many smaller debtors. As strange as it may sound, it was too expensive for smaller businesses to file for bankruptcy and reorganize under Chapter 11. The expense of funding a creditors committee, the U.S. Trustee fees, and costs of preparing a disclosure statement and soliciting a plan of reorganization were too much for many businesses. Not only was it expensive, but small business owners could lose control of the business if unsecured creditors did not support the reorganization. To remove these barriers to reorganizing under the Bankruptcy Code, Congress enacted the new Subchapter V of the Bankruptcy Code. The new Subchapter seeks to simplify the reorganization process by eliminating some of the large expenses of Chapter 11 bankruptcy cases, including funding a creditors committees and certain United States Trustee fees, while speeding up the process by requiring a reorganization plan to be filed within 90 days of the bankruptcy filing and eliminating the requirement to file a disclosure statement. Subchapter V also provides small business owners a better opportunity to retain ownership of their business through the reorganization process by eliminating the â€œabsolute priority rule (owners can retain their equity in a Subchapter V small business over the objection of a class of unsecured creditors, without paying those creditors in full). This program will address the new features of Subchapter V of the Bankruptcy Code, who may be eligible to reorganize under the Subchapter, and compare a small business reorganization to a typical Chapter 11 bankruptcy case.

Available in States

California
Georgia
New Jersey
New York
Texas Self Study

PROGRAM CREDITS

Areas of Professional Practice : 1 Credit

Presenters

Andrew

Weissman, Esq.

Celesq® Programs