June 25, 2021Alerts

Bankruptcy Case Alert: Subchapter V in Practice One Year Later

On March 27, 2021, President Biden signed the COVID-19 Bankruptcy Relief Extension Act of 2021 into law and thereby extended the $7.5 million debt limit for subchapter V eligibility for one additional year.  Subchapter V has been a popular option for small businesses due to its streamlined nature and reduced costs.  However, the lack of precedent interpreting subchapter V raises questions concerning its flexibility and practical impact.  This article provides a brief overview of the benefits of proceeding under subchapter V in Delaware and the types of transactions that may be consummated through subchapter V.