National Law Review is reporting that the Subchapter V Debt Ceiling has been Restored to $7.5 Million. With the new law, the $7.5 million debt ceiling will remain effective until June 21, 2024. The article can be found at https://www.natlawreview.com/article/subchapter-v-debt-ceiling-restored-to-75-million
Jim Shenwick Esq. 212 431 6224 jshenwick@gmail.com
In these challenging economic times, Subchapter V may be a very helpful tool to help businesses reorganize.
Cantwell-Cleary Co., Inc. obtained a $4 million state court judgment against Cleary Packaging, LLC, a company formed by Cantwell-Cleary's former president and CEO. A state court action alleged intentional interference with contracts, tortious interference with business relations, and related claims.
As a result of the judgment, Cleary Packaging filed for bankruptcy under Chapter 11 of the Bankruptcy Code, electing to proceed under Subchapter V. In its bankruptcy plan, Cleary Packaging proposed to pay Cantwell-Cleary only 2.98% of its judgment, with the remainder of the debt to be discharged. Cantwell-Cleary filed an adversary proceeding seeking a determination that the state court judgment was a debt resulting from "willful and malicious injury" that was not dischargeable under Sections 1192 and 523(a)(6) of the Bankruptcy Code.
Interestingly the bankruptcy court dismissed Cantwell-Cleary’s adversary proceeding, holding that the discharge exceptions in § 523(a) do not apply to corporate debtors. On appeal, the Fourth Circuit addressed the issue of whether Cleary Packaging, as a Subchapter V corporate debtor, can discharge its $4 million debt to Cantwell-Cleary “for willful and malicious injury.”
The Fourth Circuit reversed the Bankruptcy Court and held that the discharge exceptions in section 523 of the Bankruptcy Code apply to corporate debtors in Subchapter V cases where the debtor does not confirm a consensual plan.
The Fourth Circuit decision is the first to address the question of what exceptions to discharge apply in cases under Subchapter V.
A more detailed article discussing the In re Cleary Packaging can be found at National Review.com at https://www.natlawreview.com/article/fourth-circuit-decision-clarifies-application-exceptions-to-discharge-subchapter-v
Individuals with questions about Subchapter V can contact Jim Shenwick, Esq at 212 541 6224 or jshenwick@gmail.com
The Fourth Circuit’s recent decision In re Cleary Packaging, LLC, 2022 WL 2032296 (4th Cir. June 7, 2022) holds that in certain Subchapter V cases the statutory exceptions to the bankruptcy discharge will apply to corporate debtors. An article at National Review explains generally, in a traditional Chapter 11, exceptions to discharge for corporate debtors are more limited if the corporation is not liquidating. "Based on the Fourth Circuit’s decision in In re Cleary Packaging, LLC, Subchapter V includes broader exceptions to discharge for a debtor that cannot confirm a consensual plan, including claims against corporate debtors for certain types of fraud and other willful and malicious injuries." The article can be found at https://lnkd.in/g6i2vEbF
Jim Shenwick, Esq 212 541 6224 jshenwick@gmail.comThe Taxman Cometh: The IRS wants in on your Venmo, see the article at https://nypost.com/2022/06/09/the-taxman-cometh-the-irs-wants-in-on-your-venmo/?utm_source=gmail&utm_campaign=android_nyp
As the article provides, any income you earn over $600 is now being reported to the Internal Revenue Service by payment apps including eBay, Venmo and Airbnb
Forewarned, is forearmed! Jim Shenwick Esq 212 541 6224 jshenwick@gmail.com
Forbes Advisor has very interesting and informative article about Chapter 13 Bankruptcy, it can be found at Forbes Advisor Chapter 13
Those people with questions about personal bankruptcy should contact Jim Shenwick, Esq. 212 541 6224 jshenwick@gmail.com
