Business Bankruptcy in New Orleans: 5 Facts About the Eastern District of Louisiana

"Amounts charged in a revenue-based financing transaction, whether in the nature of a fee, discount, or otherwise, are not interest." That sentence has been Louisiana law since August 1, 2025, and a New Orleans business that brings its merchant cash advances into bankruptcy court now brings them into a state whose legislature has already said what they are.

The Bankruptcy Code a New Orleans company files under is federal and uniform. The court it files in, the procedures that court publishes for larger cases, the homestead an owner can keep, and that sentence about interest are local, and they are what this page covers.

1. Orleans and Jefferson Parishes Sit in the Eastern District, Baton Rouge Does Not

Louisiana is divided by 28 U.S.C. 98 into "the Eastern, Middle, and Western Districts of Louisiana." The Eastern District takes the parishes of Assumption, Jefferson, Lafourche, Orleans, Plaquemines, Saint Bernard, Saint Charles, Saint James, Saint John the Baptist, Saint Tammany, Tangipahoa, Terrebonne, and Washington, with court held at New Orleans and Houma. The Middle District sits at Baton Rouge; the Western District at Alexandria, Lafayette, Lake Charles, Monroe, Opelousas, and Shreveport.

A business in Jefferson Parish and one in Saint Tammany share a district. A Baton Rouge supplier to both does not.

2. Poydras Street for the Court, Maestri Place for the Trustee

The Eastern District's bankruptcy court is at 500 Poydras Street, Suite B-601. Louisiana and Mississippi make up Region 5 of the U.S. Trustee Program, and the regional office is in New Orleans at 600 S. Maestri Place, Suite 840-T, which places the office supervising a New Orleans chapter 11 case in the same city as the court, a convenience not every region affords.

3. General Order 2019-4 Sorts the Larger Cases From Everyone Else

The Eastern District handles its complex chapter 11 cases under General Order 2019-4, issued December 4, 2019 and amended as of January 10, 2025. A complex case, in the order's words, "requires special scheduling and other procedures because of a combination of one or more of the following factors": the size of the case, where "usually the total debt owed by the debtor(s) exceeds $10 million"; a large number of parties in interest, "usually more than 50"; publicly traded securities; a request for treatment as a prepackaged or rapid prepackaged case; or "Any other circumstance." The 2025 amendment added procedural guidelines for those prepackaged cases.

The mechanics are front-loaded. The debtor files a Notice of Designation of a Complex Case "contemporaneously with the bankruptcy petition," serves the designation order "within three days," and gives notice of first-day emergency hearings. Counsel "should contact" the court's designated courtroom deputies "as early as possible prior to filing" to obtain a setting for those hearings. The court's homepage now states that it "will now accept Electronic Appearances for Complex Cases," and it keeps pages for its larger matters, the Archdiocese of New Orleans among them.

The debt figure is the one a mid-sized owner will look at, and it deserves a second reading. The order says "usually." A company with $6 million in debt and seventy vendors, landlords, funders, and taxing authorities could, on the text, present the case for complex treatment on the second factor alone. Whether the court would agree is for counsel to argue, and most small businesses will file without any designation at all.

4. Act 198 of 2025 Says the Funder's Charges Are Not Interest

House Bill 470 of the 2025 session became Act 198 when the Governor signed it, and it took effect August 1, 2025, as La. R.S. 9:3137.10. Its definition will be familiar to anyone who has read a merchant cash advance contract: a "revenue-based financing transaction" is one in which a person in a commercial enterprise "sells or agrees to forward a percentage of sales, revenue, or income," and the payment obligation "increases and decreases according to the volume of sales made or revenue or income received."

The statute then does two things. It declares that such a transaction "is not a transaction for the use, forbearance, or detention of money," and that the amounts charged, "whether in the nature of a fee, discount, or otherwise, are not interest." And it requires a written disclosure "at or before consummation," setting out the total funds provided, the funds disbursed if lower after fees and payoffs of earlier balances, the total to be paid, the total dollar cost, the manner, frequency, and amount of payments (or an estimated initial payment and the method behind it when payments vary), and any costs or discounts for paying early.

What the Act leaves out is almost as instructive. A law firm summary published by Mayer Brown in August 2025 observed that the law "does not exempt any types of entities, nor does it include a maximum dollar amount," "does not require providers ... to register," and "does not impose restrictions on automatic debits." The Act text contains no penalty or enforcement clause. Florida, Missouri, Utah, and Virginia all exempt deals above a dollar ceiling; Louisiana's disclosure reaches every revenue-based transaction, large or small, and then stops without saying what happens when a provider ignores it.

In a New Orleans bankruptcy the definition may matter more than the disclosure. Debtors elsewhere have asked courts to treat a merchant cash advance as a disguised loan, with the funder's charges measured as interest; courts applying other states' law have looked at the substance, including whether repayment was absolute, and the answers have turned on the terms of each contract. A Louisiana debtor who wants to make that argument now does so against a statute that has already characterized the charges, a legislative sentence that counsel will have to confront directly and that no drafting in the contract can soften. The characterization is Louisiana's own. It does not bind how other states treat the same instrument, and its reach inside a federal claims dispute is a question that will be settled case by case.

The disclosure page still earns its keep. When a funder files a proof of claim in the Eastern District, its own statement of funds provided and total to be paid, signed at the start of the relationship, is the first document a debtor's lawyer will set beside the claim.

The legislature did not say these contracts are fair. It said what they are not.

5. The Homestead Stops at $35,000, With One Exception

Louisiana has opted out of the federal exemptions; R.S. 13:3881(B)(1) limits an individual debtor to what Louisiana law and federal law other than 11 U.S.C. 522(d) exempt. The homestead in R.S. 20:1 covers a residence and land up to five acres in a municipality or two hundred outside one, and "extends to thirty-five thousand dollars in value," except for obligations "arising directly as a result of a catastrophic or terminal illness or injury," where the full value is protected. For an Orleans Parish owner with guaranties outstanding, thirty-five thousand dollars of equity is not much.

What a New Orleans Owner Weighs

A company in the Eastern District with frozen accounts, a judgment against it, or more secured debt than its assets can bear needs a Louisiana bankruptcy lawyer, and a settlement company is the wrong call. A company still operating, behind on three advances and a bank line but not yet sued, has a different first question: whether its creditors would take a restructured schedule without a court. Delancey Street works on that question for business owners. It is not a law firm, it does not appear at Poydras Street or file anything there, and it offers a free confidential review of the company's contracts, disclosures, and bank activity, coordinating with independently licensed attorneys for anything that requires one.

Louisiana spent a legislative session deciding what to call these contracts. The owner who signed one still has to decide what to do about it.