Subchapter V Update
This panel highlights some of the roadblocks that small business debtors face at the commencement of their cases, throughout the process and on the road to plan confirmation. First in line is the definition of “engaged in commercial or business activities.” Central to this issue is whether a debtor needs to be actively engaged in business operations to qualify as a subchapter V debtor. Next up is lease assumption. When is it the right time to assume? Complicating the road to confirmations is a secured creditor’s § 1111(b) election, and the panelists present pro and con arguments relating to nondebtor stay relief, injunctions and releases. Finally, the panelists discuss what the debtor can do to effectuate a consensual plan, the role of the subchapter V trustee in a nonconsensual case, and the discharge of the debtor under both scenarios.