Justia Connect Webinars Subchapter V Plan Confirmation Requirements and Strategies

CLE

Kellie W. Fisher Drummond Woodsum

Adam R. Prescott Bernstein Shur Sawyer & Nelson, PA

Subchapter V Plan Confirmation Requirements and Strategies

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Overview AI Webinar Summary

Subchapter V Plan Confirmation Requirements and Strategies

The Small Business Reorganization Act was signed into law on August 23, 2019, creating Subchapter V to Chapter 11 through the addition of sections 1181 through 1195 to the Bankruptcy Code. This webinar will focus on plan and confirmation issues within Subchapter V, including the required contents of a plan, the deadline for filing a plan, and the standards for and consequences of consensual and nonconsensual confirmation for Subchapter V debtors.

Topics covered include:

Bankruptcy Business Law

Agenda:

Introductory Overview

Subchapter V’s origins and purpose
Summary of relevant statutes in Subchapter V

Major Plan Differences Between Chapter 11 and Subchapter V

No disclosure statement
Different procedural rules for confirmation scheduling
Status conference and filing deadlines

Plan Contents: Necessary vs. Advisable Provisions

Section 1190 requirements for plan contents
Common optional Subchapter V plan provisions
Anticipating consensual vs non-consensual confirmation issues

Role of the Subchapter V Trustee in Plan Development and Confirmation

Section 1183 duties of Subchapter V trustee
How it works in practice

Requirements for Confirmation

Section 1191(a) requirements for consensual plans
Why confirmation under Section 1191(a) matters to debtors

Standards for Nonconsensual Confirmation

Section 1191(b) requirements for confirming a nonconsensual plan
What is “disposable income” and who decides?
Plan voting requirements and different approaches to nonvoting classes

Discharge Issues

Section 1192 and the scope of discharge
Split decisions on applicability of Section 523(a) to corporate Subchapter V debtors

Post-Confirmation Default and Modification

Rules for modifying a Subchapter V plan before and after confirmation

Q&A (As Time Permits)

Duration of this webinar: 60 minutes

Originally broadcast: June 5, 2026 10:00 AM PT

Webinar Highlights

This webinar is divided into section summaries, which you can scan for key points and then dive into the sections that interest you the most.

00:00 Subchapter V Overview

Subchapter V addresses issues like ownership retention and high costs in bankruptcy cases, which make Chapter 11 less viable for small businesses. The Small Business Reorganization Act aims to streamline the process, focusing on faster confirmation and more accessible rules for plan confirmation. The statute allows administrative claims to be paid over the life of a plan, differing from traditional Chapter 11 requirements. Subchapter V eliminates the need for creditors' committees, reducing costs and complexity, although exceptions exist.

14:29 Subchapter V Plans

Subchapter V requires a plan to be filed within 90 days, although confirmation can take longer, with potential for amendments. Courts may extend the 90-day deadline under specific circumstances, but the burden for extension is high. The plan must include a business history, liquidation analysis, and feasibility projections, but there is no disclosure statement required. Subchapter V allows confirmation without an impaired accepting class, easing the voting requirements compared to traditional Chapter 11. The fair and equitable standard for unsecured creditors generally involves projected disposable income over three to five years. The plan must include appropriate remedies for non-compliance, which can be challenging to define and implement.

38:33 Disposable Income and Creditor Considerations

Disposable income in Subchapter V is defined as income not necessary for business operations, allowing for ordinary expenses. Seasonal businesses must carefully manage cash flow to ensure sustainability, with courts generally accepting reasonable reserves. Creditors may object to certain expenses, but legal costs often outweigh potential recoveries, leading to limited disputes. Subchapter V encourages collaboration between creditors and debtors, fostering a more efficient process. Courts are divided on whether a class of creditors must affirmatively vote to accept a plan.

56:21 Discharge and Case Law Developments

The non-consensual discharge process under Subchapter V does not differentiate between corporate and individual debtors, raising questions about non-dischargeable debts. Recent case law suggests a shift towards applying Section 523 discharge limitations to all Subchapter V debtors, including corporations. This shift exposes corporate debtors to new risks, potentially influencing their decision to file under Subchapter V. The importance of achieving consensual plans is emphasized, since it provides more benefits.

Please note this AI-generated summary provides a general overview of the webinar but may not capture all details, nuances, or the exact words of the speaker. For complete accuracy, please refer to the original webinar recording.

Speakers

Kellie W. Fisher Shareholder
Drummond Woodsum

Kellie Fisher is a shareholder and the chair of the Bankruptcy, Restructuring, and Creditors’ Rights group at Drummond Woodsum in Portland, Maine. Kellie focuses her practice on bankruptcy matters, commercial litigation, and transactions involving distressed companies. She routinely represents financial institutions, official and ad hoc creditors’ committees, lenders, debtors, asset purchasers, equity holders, and trustees. Read More ›

Adam R. Prescott Shareholder
Bernstein Shur Sawyer & Nelson, PA

Adam R. Prescott is a shareholder at Bernstein, Shur, Sawyer & Nelson, PA in Portland, Maine, where he represents businesses and individuals in bankruptcy, out-of-court restructurings, and other complex transactional and litigation matters, with an emphasis on chapter 11 cases. Adam has represented chapter 11 debtors and post-confirmation trustees in cases filed in numerous jurisdictions, including recent matters in bankruptcy courts in Maine, Massachusetts, Vermont, Ohio, Texas, and Delaware. Adam’s chapter 11 practice includes representing businesses in a diverse array of industries, such as health care, manufacturing, transportation, energy, real estate development, hospitality, and retail, and he has represented numerous small business debtors in successfully reorganizing under the Small Business Reorganization Act of 2019 (Subchapter V). Read More ›

Continuing Legal Education (CLE) Credits

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Alaska CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 4, 2031

California CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: June 30, 2028

Hawaii CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 4, 2028

Illinois CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: June 4, 2028

New Jersey CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.20 General

Earn Credit Until: June 4, 2027

North Carolina CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: February 28, 2027

Ohio CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: December 31, 2026

Pennsylvania CLE

Status: Approved

Format: On-Demand

Credits: 1.00 Substantive Law, Practice, and Procedure

Earn Credit Until: June 4, 2028

Texas CLE

Status: Approved

Format: On-Demand

Credits: 1.00 General

Earn Credit Until: May 31, 2027

Vermont CLE

Status: Approved

Format: Live (Virtual), On-Demand

Credits: 1.00 General

Earn Credit Until: June 5, 2031

West Virginia CLE

Status: Approved

Format: On-Demand

Credits: 1.20 General

Earn Credit Until: December 31, 2029

This presentation is approved for one hour of General CLE credit in Alaska, one hour of General CLE credit in California, one hour of General CLE credit in Hawaii, one hour of General CLE credit in Illinois, one hour of General CLE credit in North Carolina, one hour of General CLE credit in Ohio, one hour of Substantive Law, Practice, and Procedure CLE credit in Pennsylvania, one hour of General CLE credit in Vermont, and one hour of General CLE credit in West Virginia. This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.20 hours of total CLE credit. This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.00 credit hours.

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