GREGORY STERN AND MONICA O’BRIEN BREAK NEW GROUND IN SUBCHAPTER V BANKRUPTCY ISSUE
SubChapter V Small Debtor bankruptcy case under Chapter 11 of the Bankruptcy Code offers a faster and economical procedure for small businesses to reorganize their finances and continue in business. But as with many questions in bankruptcy law, some issues are vague enough to offer contrary interpretations. Often the different interpretations defeat the ability to reorganize. Gregory Stern and Monica O’Brien helped guide a Chicago Bankruptcy Judge away from an adverse interpretation and obtained the result that will help small businesses to successfully reorganize. Corporate debtors in a traditional Chapter 11 case are immune to most challenges to the dischargeability of a debt. The question is whether the same immunity applies to a corporate small business in a SubChapter V Chapter 11? Earlier decisions of courts have adopted the rule that the exceptions to discharge are applicable to corporate small business debtors in a SubChapter V Chapter 11 cases. See, Cantwell-Cleary Co. v. Cleary Packaging LLC (In Re Cleary LLC), 36 F.4 th 509 (4 th Cir. 2022). Other courts have ruled otherwise. Lafferty v. Off-Spec Solutions, LLC (In re Off-Spec Solutions, LLC), 651 H.R. 862 (B.A.P. 9th Cir. 2023); In re 2 Monkey Trading, LLC, 650 B.R. 521, 522–23 (Bankr. M.D. Fla. 2023). Our firm litigated the very same issue in a Chicago SubChapter V case to a successful conclusion for our client. A union [...]