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Trustee in Subchapter V Bankruptcies
July 24, 2020 | Freya Allen Shoffner, Esquire

Can The Subchapter V Trustee Be Your Business' Best Friend?

The Trustee in Subchapter V Bankruptcies


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Subchapter V of Chapter 11 bankruptcy is an expedited process for small businesses.

Simplifying the process means that filing under Subchapter V significantly reduces the time and money typical bankruptcy takes.

Unlike in a traditional Chapter 11 bankruptcy, a trustee is automatically appointed under a Subchapter V bankruptcy. The debtor retains control over their operations and assets. Under Chapter 11 a trustee is only appointed for cause and loses control over their operations and assets.

The Subchapter V trustees are largely attorneys and accountants. Their primary role is that of mediator between the debtor and creditors. A Subchapter V trustee facilitates a consensual plan of reorganization. The trustee may also serve as a financial advisor covering cash flows, interest rates, payment requirements, and other related financial matters. The trustee monitors the debtor's affairs, evaluates their assets, and assesses their prospects for success.

The trustee serves a vital role as mediator and facilitator in Subchapter V of Chapter 11 bankruptcies. Having the trustee is an important difference between a traditional Chapter 11 bankruptcy and the Subchapter V of Chapter 11 Bankruptcy Code. The trustee, a neutral third-party, helps to make a fair resolution between the debtor and its creditors.

With the right help, you are more likely to succeed. The attorneys at Shoffner & Associates will be happy to help you.

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