The U.S. Supreme Court’s opinion is Truck Insurance Exchange v. Kaiser Gypsum Co., Inc., Case No. 22-1079, Decided June 6, 2024.

Opinion’s Q & A

The Truck Insurance question is this:

• Whether an insurer with financial responsibility for a bankruptcy claim is a “party in interest” under § 1109(b)?

The Supreme Court’s answer is this:

On April 23, 2024, the American Bankruptcy Institute’s Subchapter V Task Force issued its Final Report.

This article is the eighth in a series summarizing and condensing the Task Force’s Final Report into “a nutshell.” The subject of this article is:

• whether the Subchapter V trustee or other party in interest should be allowed to file a plan after debtor’s removal from possession.[Fn. 1]

Recommendation

We have a direct statutory conflict:

• one statute requires an ERISA dispute to be resolved in arbitration; but
• a bankruptcy statute requires the same dispute to be resolved in bankruptcy.

Which statute should prevail? The bankruptcy statute, of course.

• That’s the conclusion of In re Yellow Corp.[Fn. 1]

Statutory Conflict

The In re Yellow Corp. case presents a direct conflict between these two federal statutes (emphases added):

On April 23, 2024, the American Bankruptcy Institute’s Subchapter V Task Force issued its Final Report.

This article is the seventh in a series summarizing and condensing the Task Force’s Final Report into “a nutshell.” The subject of this article is:

• whether the $7,500,000 debt cap for Subchapter V eligibility should remain or revert to an interest-adjusted $3,024,725.

Recommendation

Redefine Australian Investments Limited (Company), an Irish-registered company was placed in voluntary liquidation on 24 January 2018. Martin Ferris was appointed as the liquidator (Liquidator).

The Proceedings

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 (Act) has been signed into law but awaits a commencement order to bring it into operation.

In summary, the Act amends the Companies Act 2014 (Companies Act) by modifying the attribution test for related companies to contribute to the debts of the company being wound up, broadening the operative time for unfair preferences, and varying the test for reckless trading.

1. Related company contribution

On April 23, 2024, the American Bankruptcy Institute’s Subchapter V Task Force issued its Final Report.

This article is the sixth in a series summarizing and condensing the Task Force’s Final Report into “a nutshell.” The subject of this article is:

• whether a Subchapter V trustee should act as a mediator.[Fn. 1]

Recommendation

“Subchapter V relieves small business debtors from the absolute priority rule.”[Fn. 1]

• This was the excuse for a contorted grammatical interpretation, against the debtor, of a Subchapter V statute by the Fifth Circuit Court of Appeals.

The Fourth Circuit Court of Appeals gives the same excuse for the same contorted grammatical interpretation — like this:

On April 23, 2024, the American Bankruptcy Institute’s Subchapter V Task Force issued its Final Report.

This article is the fourth in a series summarizing and condensing the Task Force’s Final Report into “a nutshell.” The subject of this article is:

The opinion is In re Packet Construction, LLC, Case No. 23-10860 in the Western Texas Bankruptcy Court (issued April 30, 2024, Doc. 103).

Subchapter V Issue & Ruling

Here’s the issue raised by the Subchapter V Trustee’s plan objection and the Bankruptcy Court’s ruling thereon.

–Issue