Subchapter V

Congress has amended the Bankruptcy Code to include new subchapter v of chapter 11. By doing so, Congress has provided small business debtors with a better opportunity to emerge from chapter 11 as a reorganized debtor. For too long, the framework, expense and complexity of chapter 11 has meant that only large companies with consistent operational income could obtain confirmation of a chapter 11 plan. Now, confirming a chapter 11 reorganization plan for businesses with liabilities of less than $7.5 million is substantially easier. Among other reasons, the absolute priority rule is no longer a bar to retaining equity in the reorganized debtor. To learn more about subchapter v, and whether reorganization is the right approach for your business, please contact the Law Offices of Christopher L Young today.