Download your Chapter 11 Timeline – Subchapter V Case Example

A printable timeline is a great way to visualize the steps involved in a chapter 11 sub chapter V business bankruptcy case. This is especially helpful for individuals who are entering into the chapter 11 process for the first time. By using a printable chapter 11 subchapter V timeline, you can easily visualize all of the steps of your chapter 11 sub chapter V case and chart out the entire process with one document.

Instructions:

  • Click anywhere on the image above, then print off the printable chapter 11 subchapter V timeline.
  • A numbered reference ( ) appears at the end of many of the captions on the timeline. The reference numbers correspond to the Notes below.
reference number instructions for printable business bankruptcy timelines

Notes:

A complete printable chapter 11 subchapter V timeline will be in your hands with a few clicks.

(1) The Fair Debt Collection Practices Act…

Prohibits debt collectors from contacting your business once you (or your attorney) notify them. Notification through phone, mail, email, or meeting, stating that a bankruptcy attorney now represents your business. You must also give the attorney’s name and complete contact information to the debt collectors. Debt collectors can contact the attorney and impose fines for each contact that violates the law. The Act does NOT prevent debt collectors or creditors from continuing efforts to collect the debt. Also, neither does it pause a pending lawsuit or prevent creditors from bringing a new suit against your business. However, as a practical matter, after knowing that your business is pursuing bankruptcy most collection efforts will stop, thus anticipating the bankruptcy court’s issue of the Automatic Stay.

(2) Subchapter V Petition Filed with the Bankruptcy Court:

The filing package comprises the same forms and documents typically submitted for a Chapter 11 Small Business Case filing which includes the following:

  • Voluntary Petition for Non-Individuals Filing for Bankruptcy (Official Form 201),
  • Creditor/Mailing Matrix – A list of names and addresses of all the debtor’s creditors. The list is formatted as a mailing list as per the instructions from the bankruptcy court in which the debtor files.
  • List of Creditors Who Have the 20 Largest Unsecured Claims Against Debtor. And Are Not Insiders (Official Form 204) along with payment of…
  • Filing Fee $1,167 and
  • Administrative Fee $571.

Also, there are 14 additional Exhibits, Schedules and supporting documents required for filing a printable chapter 11 subchapter V bankruptcy case. The court strongly encourages to file these documents along with the other documents as given above. However, the court allows filing of these documents for up to 14 days following the date of the Petition filing.

In most types of bankruptcies, the debtor must relinquish control of all property/assets to a court appointed trustee. Chapter 11 subchapter V cases are the exception. The business retains control over itself, its property/assets, and becomes a Debtor-In-Possession upon filing the bankruptcy petition. This stands valid unless the court believes the representatives of the business may have committed fraud, misconduct, or are grossly incompetent. However, as a Debtor-In-Possession (DIP), the business is now a fiduciary with all the powers and duties of a trustee. They must protect the property of the business and also  conduct the business in the best interests of its creditors. The U.S. Trustee oversees the case and monitors the activity. It also monitors the conduct and operations of the business to make sure the representatives faithfully perform its fiduciary duties.

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(3) 1st Day Hearing:

The court will hold a 1st Day Hearing within 24 to 48 hours of its receipt of the filing package. The court will issue an Automatic Stay.”. The Automatic Stay immediately suspends all “non-priority debt” collection efforts, foreclosures, evictions, repossessions, and pending and contemplated lawsuits; until the court grants, converts, or dismisses the bankruptcy.

At this meeting, the court will consider all 1st Day Motions filed by your attorney.

The bankruptcy attorney will file “1st-Day Motions” with the bankruptcy petition. This helps in asking the court’s blanket approval allowing the business to conduct its functions. This includes all financial transactions and operations that are necessary in the ordinary course of running the business. The attorney will also include a motion asking the court to approve “Debtor-In-Possession”borrowing – known as a “DIP Loan”. Thus it can enable the business to borrow cash needed to pay expenses necessary to keep operating during the progress of the bankruptcy case. The 1st day hearing of the court, will review and order these motions.

The court will define the date for the Status Conference (60 days following the Petition date). This is to determine that the business is “on-track”. And to make sure it is fit to deliver a “consensual Plan of Reorganization by the 90- day deadline.

(4) The U.S. Trustee Appoints an Independent Case Trustee:

In a Subchapter V case, the business MUST file a Plan of Reorganization within 90 days following the Petition date. What’s more, the court expects that it will be a “consensual” Plan, which means that the impaired creditors (the general, unsecured creditors) have participated (via negotiations) in the formation of the Plan. And are ready to vote in favor of its confirmation by the court.

The Case Trustee’s role, primarily, is to oversee and assure the timely completion of the Plan. The Trustee will also ensure to mediate the frequent negotiations between the business and its creditors.

(5) Initial Debtor’s Interview with the U.S. Trustee:

Within the first two weeks (usually sooner) of filling printable chapter 11 subchapter V case, the business’s representatives must meet with the U.S. Trustee. The U.S. Trustee will review all filed documents, determine that the business will be able to present a viable Plan of Reorganization. Also, it is able to explain the steps in the processing of the case and what the court expects. This includes information and conduct – from the business and its representatives, the role of the court and the U.S. Trustee and Case Trustee, and answer any related questions. Any legal advice is not permitted to provide by the U.S. Trustee .

(6) Section 341 Meeting of Creditors:

The Bankruptcy Code requires the business’s primary representative to attend this meeting in person. The bankruptcy attorney may accompany the business representative but may not attend in lieu of the business representative. The meeting will typically run from 10 to 20 minutes and creditors rarely attend. The purpose of the meeting is to allow the U.S. Trustee (and attending creditors) to question the representative(s), under oath, about the truthfulness and accuracy of all forms, that they file with the court as well as to get any additional or clarifying information that they need.

(7) 90-Day Negotiated Development of Consensual Plan:

The Code requires Subchapter V debtors to file a Plan of Reorganization (Form 425A with its required Exhibits, Schedules and supporting documents). This has to be submitted no later than 90 days following the Petition Date.(Disclosure Statement – There is no requirement for Form 425B in a Subchapter V case.) The court expects to submit a “consensual” Plan as given above. This will require regular communications (negotiations) between the business’s representatives and its creditors.

The Case Trustee tasked with overseeing, mediating, and expediting this process. As negotiations progress, the Plan will undergo multiple revisions until it is acceptable to the general. Also, it should be acceptable to unsecured creditors and the equity interest holders (owners) of the business.

What if it is not possible to achieve the consensus?

If the Case Trustee believes further negotiations will be futile, the Trustee may approve submission of the Plan to the court if it meets the requirements of the Code including:

  1. the Plan is feasible, and liquidation will not follow its confirmation (unless the plan is a liquidating plan) or the need for further bankruptcy relief and another financial reorganization, and
  2. it is fair and non-discriminatory in its treatment of creditors; and
  3. it is proposed in good faith; and
  4. the creditors will receive at least as much as they would get if the business filed for a Chapter 7 Liquidation.
  5. the plan and its sponsor comply with all the requirements of the Code. Particularly with the confirmation requirements of Section 1129.

If the Case Trustee does not believe I took all the above requirements into consideration, the Trustee can recommend conversion to a Liquidation Plan or case dismissal by the court.

(8) Status Conference:

The Code requires to conduct a Status Conference “not later than 60 days after filing the Petition, to further the expeditious and economical resolution” of the Subchapter V case 11 U.S.C. § 1188(a). Not later than 14 days before the status conference, “the debtor shall file with the court. They should also serve to the trustee and all parties in interest a report that details the efforts the debtor has undertaken. And will undertake to attain a consensual plan of reorganization.” 11 U.S.C. § 1188(c).

(9) Monthly Reports:

The business must file a Monthly Report (Form 425C) by the 21st day following the close of month under question. Monthly reports are due each month following the filing of the chapter 11 subchapter V bankruptcy petition, continuing until Plan confirmation.

(10) Confirmation Hearing:

The court will consider and resolve objections to the Plan. And will enter the votes of the faulty creditors and equity interest holders to accept or reject the Plan.

(11) Plan Confirmation:

If a consensual Plan is submitted, the court will verify it. The court will see if they have met the Code requirements for confirmation (including a), b), c), and e) above). They will also verify that the following debts have been paid in full or will be paid in full pending receipt of the committed Exit Loan proceeds:

  • DIP Loans
  • All delinquent payments for “reaffirmed” secured debts
  • All delinquent payments for “accepted” leases and service contracts
  • All administrative expenses and fees

The court will issue a Notice of Plan Confirmation and a Discharge Notice for all non-priority debts not provided for in the Plan.

In the case of submission of a Non-consensual plan, the court may approve the plan, if it meets all the requirements of the consensual plan, and the creditors get as much as what they would get filing the plan under Chapter 7 Liquidation. Download your printable chapter 11 subchapter V timeline today.

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