Long Island & NYC Subchapter V Bankruptcy Lawyer

In a V-11 case the entity needs to be in business — although there is authority that the entity might have been in business and is now winding down — and the majority of the debt needs to be commercial or business debt. The temporary $7.5 million CARES Act ceiling expired on June 21, 2024; the Subchapter V debt limit (secured and unsecured, non-contingent and liquidated) is now $3,424,000, as of April 1, 2025. The difference in the type of trustee also matters: the business trustee in V-11 acts as a kind of advisor to the debtor’s attorney on business decisions, whereas the U.S. Trustee in an SB-11 tends to take a much more legalistic and administrative approach that is not always conducive to an easy reorganization.

A V-11 case has less overhead for the debtor: it does not have to pay the quarterly trustee fees due to the U.S. Trustee’s office in an SB-11 or Standard-11 case, which could be significant over the life of the case, and there is no requirement for a creditor’s committee (also funded by the debtor). On timing, in V-11 the debtor has only 90 days to file a plan, but can ask for extensions, and there is no deadline to confirm the plan and no exclusivity deadline. In SB-11 the deadline is 300 days to file but only 45 days after the plan is filed to confirm it — and unless that deadline is extended by a Court order signed within the 45 days, the debtor loses its ability to reorganize. Generally, the deadlines in SB-11 are strict and meant to hurry rather than help the debtor, while V-11’s deadlines are more forgiving.

V-11 also does not require a disclosure statement, and the plan is generally short and comparable to a Chapter 13 plan; SB-11 does not as boldly abbreviate the Standard-11 requirements. And on non-residential real property leases, V-11 gives the debtor an advantage: if the debtor can show it has experienced financial difficulty because of Covid-19, its time to perform under a lease could be extended for 120 days. The CARES Act also extended, for all debtors (not just V-11 debtors), the time to assume a lease for non-residential real property by an additional 90 days — so the court could extend the debtor’s time to assume or reject the lease for up to 300 days without the landlord’s consent. Ultimately, V-11 originated under the small-business-sympathetic SBRA of 2019 as modified by the CARES Act, while SB-11 originated with the 2005 Bankruptcy Abuse Act, which was unsympathetic toward debtors and sought to move small business cases forward to prevent abuse.

The advantages to eligible businesses and individuals under Subchapter V are tremendous — particularly the elimination of the Absolute Priority Rule, which makes it considerably easier for individuals to confirm Chapter 11 plans. However, it is always important to have a bankruptcy lawyer by your side to ensure the process goes smoothly. Our office has filed many Chapter 11 cases and has knowledge and expertise in these cases. The bankruptcy attorneys at The Law Office of Ronald D. Weiss, P.C. can assist you with filing for a Chapter 11 bankruptcy, as well as help you get a better understanding of Subchapter V and all its benefits.