A key temporary bankruptcy related response to the pandemic has been re-implemented and extended with the passage of the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”) which extends the increase in the subchapter V debt limit for eligible businesses to $7.5 million for another two years.

A key bankruptcy-related response to the pandemic has ended as the increased debt limits under subchapter V of chapter 11, passed by Congress in the CARES Act, have expired. In an effort to provide bankruptcy relief and access to subchapter V of chapter 11 of the Bankruptcy Code to a greater number of small businesses, Congress raised the debt limit for subchapter V eligibility from the original $2,725,625 million to $7.5 million via the CARES Act, passed in March of 2020.

Today, the Supreme Court resolved a circuit split regarding whether a creditor’s post-petition refusal to turnover bankruptcy estate property that it repossessed or impounded prepetition violates the automatic stay. The Supreme Court ruled in favor of the creditor and decided that it did not violate the automatic stay.