A big win for creditors of small business debtors
The “big” win: In a decision that helps balance Subchapter V’s pro-debtor provisions, the U.S. Court of Appeals for the Fifth Circuit recently held that the Bankruptcy Code’s exceptions to discharge apply to a corporate Subchapter V debtor with a nonconsensual plan (even though the exceptions do not apply to corporate debtors in “traditional” Chapter 11 cases). In doing so, the Fifth Circuit joined the only other Circuit-level court to address the issue (the U.S. Court of Appeals for the Fourth Circuit), bucking what appeared to be a growing trend among other, non-Circuit-level courts that...
