BackgroundCongress passed The Small Business Reorganization Act of 2019 (the “SBRA”) for small businesses, currently defined as debtors with less than $7.5 million in debt. SBRA created a new Subchapter V, which can be used by both individual debtors or business entities, such as corporations, limited liability companies or partnerships (hereinafter “Business Entities”). While Congress…

On April 19, 2023, the U.S. Supreme Court issued its opinion in MOAC Mall Holdings LLC v. Transform Holdco LLC, 598 U.S. (2023), reversing the Second Circuit decision and determining that the limitations on appeals of bankruptcy sale orders provided in section 363(m) of the Bankruptcy Code are not jurisdictional. Rather section 363(m) merely provides…

On January 30, 2023, the Third Circuit Court of Appeals dismissed the bankruptcy filing by Johnson & Johnson’s subsidiary, LTL Management, LLC (“LTL”). The Circuit Court reversed the New Jersey Bankruptcy Court and held that LTL did not file the bankruptcy case in good faith and therefore was ineligible to petition the bankruptcy court for…

Following the publishing of this article, on June 7, 2022, the House of Representatives passed the Bankruptcy Threshold Adjustment and Technical Corrections Act with wide bipartisan support (392-21).  On June 21, 2022, President Biden signed the bill into law (PL 117-151).On April 28, 2022, Central District of California Bankruptcy Judge Ernest M. Robles issued a…

Agricultural economists have long warned of a looming farm crisis. However, for the most part, they have been wrong. In 2021, nationwide Chapter 12 family farmer bankruptcy filings were at second lowest level since Chapter 12 was enacted in 1987. The low level of Chapter 12 filings is all the more surprising given that Congress…

Reaching an outcome in line with two other circuit courts, on February 16, 2022 the Fifth Circuit Court of Appeals permitted a Chapter 11 trustee to sell a debtor’s real property free and clear of the leasehold estates held by certain non-debtor lessees. See In re Royal Street Bistro, L.L.C., 2022 WL 499938 (5th Cir.…

Introduction
A newly created subsidiary of Johnson & Johnson recently filed Chapter 11 to manage 38,000 pending talc-related lawsuits and future talc-related claims. There is nothing especially new about using Chapter 11 to deal with mass tort litigation. In the past three decades, thousands of companies, dozens of religious organizations, and even the Boy Scouts…