2024 is starting out with a bang in terms of commercial chapter 11 filings, which rose 21% this January as compared to January 2023, according to Epiq. Even more noteworthy is that 38% of these debtors elected Subchapter treatment, representing a 43% increase in Subchapter V cases filed in January compared to January 2023. The increased number of Subchapter V filings is being driven, at least in part, by the fact that the Subchapter V debt eligibility threshold of $7.5 million will decrease to $2,725,625 absent Congressional action. The other reason driving the increase is, simply stated, because Subchapter V is a very effective tool for struggling companies that meet its requirement. Read Subchapter V of Chapter 11: a User's Guide to learn everything you need to know about this tool.
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