Subchapter V is Good for Business

The post below was written by Jeffrey Bast from Bast Amron. Jeffrey is a partner at Bast Amron and will be speaking at our upcoming Business Bankruptcy 101 Chapter 11 Nuts and Bolts Webinar on September 19 & 21, 2023. Most recently, Jeff spoke at our Business Bankruptcy 101: Chapter 11 Nuts and Bolts program in 2020 where he attendees loved him – mentioning that he gave a comprehensive, clear, and practical presentation.

Jeff has been practicing in the insolvency and litigation arena for more than 25 years. He guides business clients through all types of insolvency-related issues including bankruptcy and bankruptcy avoidance, emphasizing corporate reorganization, workouts, and liquidation. He is a frequent speaker and writer both in the U.S. and abroad on topics related to insolvency. Jeff has been recognized by his peers and numerous publications for professional excellence including: Best Lawyers in America, Chambers and Partners, Martindale Hubbell, South Florida Legal Guide, and Florida Super Lawyers.

Thank you for the insight, Jeff!

Subchapter V is Good for Business

July 11, 2023
By: Jeffrey Bast

If you are not a bankruptcy lawyer, read this and if you are a bankruptcy lawyer, you should too. If you represent small businesses, whether in deals or disputes, you should know about a useful tool that is being overlooked by many. It allows small businesses to restructure their debts and emerge with a clean bill of health and ownership intact. I am talking about Subchapter V bankruptcy. It was introduced as part of the Small Business Reorganization Act of 2019, and it came into effect at the end of February 2020. You probably did not even notice. In fairness, we did have a little pandemic just a few weeks later.

Subchapter V bankruptcy basically allows small business owners (with debts of no more than $7.5 million thanks to the CARES Act) to retain control of their business and reorganize their debts through a streamlined process without the burdens of a creditor’s committee or the expenses of monthly US Trustee fees. It is faster and cheaper than a typical chapter 11. This is particularly helpful for small business owners who may not have the resources or time to engage in lengthy creditor negotiations and court proceedings.

The streamlined Sub V process can be completed in a more efficient manner, saving both time and money for the owner. Small business owners can also take advantage of a number of other benefits including, the ability to reduce their debt obligations, sell encumbered assets, and assume or reject burdensome leases and other contracts. These tools can be a lifesaver for business owners facing overwhelming debt obligations, cash flow concerns, or the risk of losing litigation.

The most obvious benefit of Sub V is that it provides small business owners with a vehicle to save their businesses. Many small business owners facing financial distress may feel as though they have no other option but shut down. Perhaps worse, others will put themselves in personal debt, borrowing money, and even mortgaging homes to keep their business afloat. But now you can offer them a lifeline. Subchapter V bankruptcy can allow them to restructure and emerge from bankruptcy with clean balance sheets and more viable entities.

Of course, it’s important to note that Subchapter V bankruptcy is not right for every small business owner. Before deciding to file for bankruptcy, business owners should carefully consider their options and consult with a qualified business bankruptcy attorney. If your client is struggling financially or perhaps they risk losing that major litigation, Subchapter V may assist you in helping them get back on track.

If you’d like to learn more about Subchapter V, Jaime Leggett, also at Bast Amron, will spend a good 90 minutes on this topic at our upcoming Business Bankruptcy 101 Chapter 11 Nuts and Bolts Webinar on September 19 & 21, 2023 (the same one at which Jeff is speaking again).

It promises to be an excellent seminar!



Cryptocurrencies Draw California Lawmakers’ Attention

Cryptocurrencies like Bitcoin have been around for years, however, lately they’ve been a hot topic in the news and among attorneys.

This blog post from Jennifer Post, of Thompson Coburn, sheds some light on the issue. Jennifer will be speaking at our Cryptocurrencies, Blockchain & Initial Coin Offerings seminar in June 2018.

Virtual currencies remain largely unregulated, as well as the activities which support them (exchanges, wallets, etc). However, due to sudden interest from investors and the creation of several new cryptocurrencies, state lawmakers are beginning to consider how they should regulate these activities.

California has introduced the Virtual Currency Act (A.B. 1123), which would require those involved in a “virtual currency business” in California to first register with the state’s Commissioner of Business Oversight. A.B. 1123 defines a “virtual currency business” as any business “maintaining full custody or control of virtual currency in this state on behalf of others.”

Learn more by reading Jennifer’s post and at our upcoming Cryptocurrencies, Blockchain & Initial Coin Offerings seminar in June 2018.

Virtual Copyrights – how will the government respond?

Virtual copyrights. What will the law do with the virtual, augmented and mixed realities coming to your smartphone soon? Jack Russo and Mike Risch don’t answer that question but they do provide a roadmap on how the intellectual property laws (and particularly federal copyright law) will adapt and adjust to provide protection for these new innovations at a recent paper entitled “Virtual Copyright” (which is a chapter in a soon to be published VR/AR legal treatise) now available here.

Further commentary is also available at Professor Michael Risch’s blog and at Computerlaw Group LLP, Jack Russo’s law firm website.

Jack Russo is the managing partner at Computerlaw Group LLC and a repeat speaker.

Mr. Russo is a frequent speaker on computer law issues and has given presentations to the American Bar Association, the Practicing Law Institute, the Computer Law Association, and the San Francisco Bay Area Intellectual Property American Inn of Court.

Mr. Russo serves as an arbitrator, mediator, and early neutral evaluator for the U.S. District Court (N.D. California), the Santa Clara County Superior Court, and the American Arbitration Association, as well as a Judge Pro Tempore of the Santa Clara County Superior Court.

Mr. Russo specializes in Internet, computer law, and intellectual property litigation. In addition, Mr. Russo is in charge of the Firm’s entrepreneurship practice.

Automatic EAD Extensions under the January 17th Regulations

The following is a guest post from frequent Pincus Professional Education speaker Carl Shusterman.  Carl has spoken at many of our California immigration programs including Asylum Law, Immigration 101 and our upcoming Visas 101.  He has over forty years of immigration experience and served as an attorney for the Immigration and Naturalization Service (INS) until 1982 when he entered private practice.  You can read the original post here.

By Carl Shusterman:

In the December 2016 issue of our newsletter, we summarized the new 366-page DHS regulation regarding employment-based immigration which will become effective on January 17, 2017.

In this article, we focus on the portion of the regulation which allows certain persons to obtain temporary automatic extensions of their Employment Authorization Documents (EADs).

Under the new regulations, the USCIS will no longer be required to adjudicate requests for EADs within 90 days.  However, persons with existing EADs will be able to apply for extensions of their work permits 180 days (up from 120 days) before they expire.
The regulation designates the following 15 categories where people will be eligible for automatic 180-day extensions of their EADs as long as they submit timely requests to extend their EADs:

  1. Aliens admitted as refugees;
  2. Aliens granted asylum;
  3. Aliens admitted as parents or dependent children of aliens granted permanent residence under section 101(a)(27)(I) of the INA;
  4. Aliens admitted as citizens of the Federated States of Micronesia, the Marshall Islands, or Palau;
  5. Aliens granted withholding of deportation or removal;
  6. Aliens granted Temporary Protected Status (TPS);
  7. Aliens who have properly filed applications for TPS and who have been deemed prima facie eligible for TPS and have received an EAD as “temporary treatment benefit”;
  8. Aliens who have properly filed applications for asylum or withholding of deportation or removal;
  9. Aliens who have filed applications for adjustment of status under section 245(a) of the INA;
  10. Aliens who have filed applications for suspension of deportation under Section 244 of the INA, cancellation of removal under section 240A of the INA, or special rule cancellation of removal under section 309(f)(1) IIRAIRA;
  11. Aliens who have filed applications for creation of a record of lawful admission for permanent residence;
  12. Aliens who have properly filed legalization applications pursuant to section 210 of the INA;
  13. Aliens who have properly filed legalization applications pursuant to section 245A of the INA;
  14. Aliens who have filed applications for adjustment of status pursuant to section 1104 of the LIFE Act; and
  15. Aliens who are the principal beneficiaries or qualified children of approved VAWA self-petitioners.

The rule does nothing to assist first-time applicants for EADs, nor does it permit automatic extensions of Advance Parole.

Many persons, such as spouses of nonimmigrants (L-2s, H-4s, etc.) are ineligible for automatic extensions of their EADs.

The automatic EAD extension portion of the regulation is more complicated than this summary of the rule would indicate.  Small employers without the resources to regularly check the USCIS website or consult with immigration lawyers may find it burdensome to comply with the I-9 requirements that this rule will entail.

It is recommended that persons with EADs should submit applications for extensions of their EADs and Advance Paroles 180 days before the expiration date to protect their ability to work and travel without interruption.  Doing so will also aid their employers.