February 05, 2025

‘Evergreen’ Retainers Are Ok Only in ‘Exceptional’ Sub V Cases, Judge Gunn Says

Washington, D.C.’s Judge Gunn describes the procedures to employ for approval and operation of an ‘evergreen’ retainer in chapter 11.

D.C. Circuit

January 23, 2025

Fourth Circuit Upholds a $31 Million Default Judgment for Discovery Abuses

Long Island’s Judge Grossman warns lawyers that they may be paid nothing if they file chapter 11 cases just to delay a secured creditor, with no legitimate strategy for selling the property, refinancing or confirming a plan.

4th Circuit

January 09, 2025

Converting from Chapter 7 to Sub V to Liquidate Is Ok, Judge Cleary Says

A corporate debtor with no income and no operating business could convert an involuntary chapter 7 case to Subchapter V of chapter 11.

7th Circuit, Illinois, Illinois Northern District

December 11, 2024

Bankruptcy Courts Don’t Agree on What’s a ‘Consensual’ Nondebtor Release

Bankruptcy Judge Paul Baisier of Atlanta disagreed with Bankruptcy Judge Craig Goldblatt of Delaware about requiring creditors to vote before they are saddled with nondebtor releases in chapter 11 plans.

11th Circuit, Georgia, Georgia Northern District

December 02, 2024

A Business that Never Generated Income Is Eligible for Subchapter V, Judge Norman Says

The definition of ‘small business’ uses the word ‘activities,’ not ‘operations,’ making nonoperating small business eligible for Subchapter V.

5th Circuit, Texas, Texas Southern District

November 19, 2024

Chicago District Judge Decides that Sub V Debtors Can Have Nondischargeable Debts

Reversing the bankruptcy court, the Chicago district judge follows the Fourth and Fifth Circuits and rejects a contrary holding by the Ninth Circuit BAP.

7th Circuit, Illinois, Illinois Northern District

November 18, 2024

Judge Thorne Describes the Quantum of Evidence Needed to Show a Plan Is Fair and Equitable

Although a ‘true-up’ cannot be imposed, a debtor could employ a ‘true-up’ to confirm an otherwise nonconfirmable plan.

7th Circuit, Illinois, Illinois Northern District

November 15, 2024

Sub V Trustee in Chapter 11 Can’t Be Enlisted to Pursue Avoidance Actions

District judge decides that an individual debtor has standing to appeal conversion from Subchapter V of chapter 11 to chapter 7.

2nd Circuit, New York, New York Southern District

November 05, 2024

Fully Secured, Nonrecourse Creditors Can Be Involuntary Petitioners, BAP Says

An involuntary petitioner whose claim was paid after filing is still counted as an involuntary petitioner, the Ninth Circuit BAP says.

9th Circuit

November 01, 2024

Substantive Consolidation May Proceed by Motion, District Judge Says

A district court in Florida upheld Bankruptcy Judge Peter Russin in holding that substantive consolidation does not require an adversary proceeding, a summons or a complaint.

11th Circuit, Florida, Florida Southern District