Subchapter V Bankruptcies Up 60% In April As Costs Weighed

May 6, 2024Media Mention

Brian Davidoff, chair of the Bankruptcy, Reorganization & Capital Recovery Group, was quoted in Law360 discussing the benefits of Subchapter V bankruptcies.


"The benefits of Subchapter V are becoming more familiar to many attorneys, who are seeing the flexibility of the statute and the effectiveness of the statute for smaller businesses," said Brian L. Davidoff, chair of the bankruptcy, reorganization and capital recovery practice at Greenberg Glusker LLP in Los Angeles.

Of all the benefits of Subchapter V, arguably the most useful is the absence of an absolute priority rule, Davidoff told Law360. That means that higher priority claims do not need to first be paid in full before lower priority creditors can receive any recovery, as long as the plan is "fair and equitable."

"That is still a lot more accessible for a small business than having to address the absolute priority rule," Davidoff said.

"As more cases have come down, and more guidance is being offered by the courts, it makes it clearer as to how the statute's going to be applied," Davidoff said.