Rochelle's Daily Wire

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

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.

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

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

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

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

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

Because ‘excusable neglect’ won’t allow a late vote to be counted, counsel must solicit votes on a plan before the voting deadline.

Nondebtor releases are valid whether the creditor votes for or against the plan, as long as notice to opt out was clear and conspicuous.