Government Archive

With the economy softening, Congress is taking steps to permanently increase the Chapter 11 debt ceiling for small businesses to qualify under the expedited Subchapter V process. For creditors, that could mean managing more Subchapter V payment plans for businesses with as much as $7.5 million in debt. The debt ceiling was first increased from $2.7 million to $7.5 million in March 2020 with the CARES Act, in response to the COVID-19 pandemic. That increase expired in March 2022 but was once again increased to $7.5 million in June 2022. That last temporary increase expired in June 2024. The…

Bankruptcy venue shopping, the practice of companies filing cases in jurisdictions they view as more favorable, has been part of the system for decades, often raising concerns among creditors about cost and participation in proceedings. Congresswoman Zoe Lofgren (D-California) has introduced legislation since 2018 to address this by requiring that Chapter 11 bankruptcy proceedings take place where the principal place of business or principal assets of the corporation are located. Despite bipartisan support for the legislation, it has failed to meaningfully advance each time. Last week, Rep…

The threshold for Subchapter V bankruptcy could permanently rise under a new bill introduced by Virginia Congressman Ben Cline. The Bankruptcy Threshold Adjustment Act of 2026 would raise the threshold from $3 million to $7.5 million, effectively allowing more businesses to file via a faster, cost-effective route to bankruptcy.   Created to offer an alternative for small businesses facing liquidation, Subchapter V was established with the Small Business Reorganization Act (SBRA) of 2019 with an initial deb…

December in Washington is dominated by last-minute negotiations on an array of must-pass bills Congress still needs to act on. Top of the list is the National Defense Authorization Act (NDAA), which funds the nation’s nearly $1 trillion annual defense budget. While predominantly focused on defense, the NDAA has become a Christmas tree for non-defense related legislation to ride along, and this year is no exception. But this year’s tree is looking comparatively bare, a reflection of how few items this Congress can agree on and the narrow vote margins Congressional leadership has to manage…

After a more than 40-day government shutdown, a small group of Senate Democrats gave Republicans the votes they needed to end the shutdown without a vote on expiring Affordable Care Act subsidies. Let’s look at what they didget. ‘Clean’ continuing resolution through January 30 The agreement to reopen the government includes a short continuing resolution that continues last year’s funding through January 30, 2026. This gives Congress a pressing deadline to continue bipartisan negotiations over a full-year funding agreement but also sets up another potential shutdown just over two months fro…

Recent comments from Treasury Secretary Scott Bessent and the White House hint at plans to pause the new regulations introduced earlier this year with the Affiliates Rule, or the 50% Rule, amid ongoing talks with China.   Why it matters: The United States Department of Commerce’s Bureau of Industry and Security (BIS) plans to suspend enforcement for a year, aligning with China’s plan to postpone export restrictions on rare earths for one year, according to the White House.   In September, BIS introduced the Affiliates Rule, restricting entities that are 50% or more owned, dire…

Anyone who has turned on the news in the past two weeks likely knows that Republican and Democratic leaders have been unable to reach an agreement on government funding as the now three-week government shutdown continues. Democrats are refusing to pass a ‘clean’ funding bill, demanding an extension of the expiring Obamacare tax credits, and Republicans are holding firm despite public polling in support of the subsidies sitting at over 70%. They argue that Congress has plenty of time to extend the subsidies. So, where does the truth lie? Unsurprisingly, somewhere in the middle. Insurance…

The Senate introduced an amendment to raise the debt limit for Subchapter V bankruptcy filings from $3 million to $7.5 million. Subchapter V of Chapter 11 of the U.S. Bankruptcy Code offers small businesses an alternative to filing for a traditional bankruptcy that is more expedited and cost-efficient but shifts some of these burdens onto credit managers.   The debt limit was initially $2.7 million when Subchapter V was created under the Small Business Reorganization Act (SBRA) of 2019, but it was raised to $7.5 million in 2020 in response to the COVID-19 pandemic. The heightened debt…