April 09, 2025

Texas Courts Are Split on Ignoring Nonvoting Classes in Confirming a Sub V Plan

A bankruptcy judge in San Antonio disagreed with two bankruptcy judges in Houston by holding that a nonvoting class is equivalent to rejecting a plan in Subchapter V of chapter 11.

5th Circuit, Texas, Texas Southern District

April 01, 2025

Priority Wage Claims Paid After Filing Are Counted Toward the Sub V Debt Cap

Wage claims and claims of critical vendors paid under ‘first day orders’ are counted toward the Subchapter V debt cap that’s rising on April 1 to about $3.4 million.

5th Circuit, Texas, Texas Southern District

March 31, 2025

Denver Judge Sides with the Circuits: Nondischargeability Infects Subchapter V

Bankruptcy judges continue to disagree on whether debts of corporations with cramdown plans in Subchapter V can have nondischargeable debts.

10th Circuit, Colorado

March 13, 2025

Opt-Out Plan Confirmed with Impaired Creditors Almost Unanimous in Support

In the Spirit Airlines reorganization, no creditors with an economic interest had opposed confirmation of a plan with opt-out releases for nondebtors.

2nd Circuit, New York, New York Southern District

March 06, 2025

Student Loans for a Professional Degree Weren’t Business Debts to Qualify for Sub V

The Ninth Circuit didn’t completely close the door to a finding in another case that student loans for a professional degree could be business debts making the debtor eligible for Subchapter V of chapter 11.

9th Circuit

February 28, 2025

Purdue Doesn’t Preclude Injunctions from Protecting Nondebtors for the Life of a Plan

New York’s Judge John Mastando saw no reason a Subchapter V plan couldn’t enjoin lawsuits against nondebtors for the life of a five-year plan.

2nd Circuit, New York, New York Southern District

February 26, 2025

Judge Oldshue Splits with Two Circuits: No Nondischargeability for Sub V Corporations

The bankruptcy judge in Pensacola, Fla., is giving the Eleventh Circuit an opening to split with the Fourth and Fifth Circuits.

11th Circuit, Florida, Florida Northern District

February 24, 2025

Forbearance Agreement Wasn’t an Enforceable Waiver of the Automatic Stay

Bankruptcy Judge Laura Grandy (politely) faulted other federal courts for failing to follow the Illinois mortgage statute and decisions by the Illinois Supreme Court.

7th Circuit, Illinois, Illinois Southern District

February 18, 2025

Nondischargeability in Sub V Only Applies When It’s a Nonconsensual, Cramdown Plan

A creditor must control a class before its debt can become nondischargeable in Subchapter V.

11th Circuit, Georgia, Georgia Middle District

February 14, 2025

Although Exempt, Social Security Benefits Must Be Reported in Subchapter V

While neither Social Security benefits nor post-petition income are estate property in Subchapter V, they must be included in an individual’s monthly operating reports, Bankruptcy Judge Jacobvitz says.

10th Circuit, New Mexico