Subchapter V Timeline: 6 Deadlines From Petition to 90-Day Plan

Ninety days is the whole of it. A Subchapter V debtor must file its plan within that period, and nearly every other deadline in the opening months of the case exists to make sure the plan, when it arrives, rests on numbers someone has already examined. The deadlines are short, they overlap, and none of them waits for the business to have a quiet week.

In a voluntary case the petition itself is the order for relief, under section 301(b), so the calendar starts the moment the filing is accepted. The hypothetical dates below assume a petition filed on March 3, counted in calendar days; counsel will confirm how each real date is computed in the district.

1. Day Zero: The Financial Statements Travel With the Petition

Section 1187(a) requires an electing debtor to file the documents described in section 1116(1): its most recent balance sheet, statement of operations, cash flow statement, and federal income tax return, or a statement under penalty of perjury that none has been prepared or filed. Bankruptcy Rule 1020(a) requires the petition itself to say whether the debtor is a small business debtor and whether it elects the subchapter, and Rule 1007(d) requires a list of the twenty largest unsecured creditors, excluding insiders, with the petition.

These papers look like formalities and are nothing of the kind. The tax return the business filed last spring, with whatever the preparer chose to show, becomes the first document the United States trustee, the Subchapter V trustee, and every creditor will compare with the plan's projections, and a gap between the two that the owner could once have explained over coffee now has to be explained under oath, by someone who may not have prepared either one. The owner learns this on day zero, or learns it at the meeting of creditors, which is worse.

A second clock also starts that day. Under Bankruptcy Rule 6003, the court may not, within 21 days after the petition, grant certain requests, among them the employment of professionals, the use of estate property to pay prepetition claims, and the assumption of leases, unless the relief is needed to avoid immediate and irreparable harm.

2. Day 14: Schedules, the Statement of Financial Affairs, and the Rest

Under Bankruptcy Rule 1007(c), the schedules of assets and liabilities, income and expenditures, executory contracts and unexpired leases, along with a statement of financial affairs, are due with the petition or within 14 days after it, which in the hypothetical is March 17. The list of equity security holders runs on the same 14 days. So does the statement, required of every debtor's attorney by Rule 2016(b), disclosing what the attorney has been paid or promised.

Extensions exist, though section 1116(3), which section 1187(b) applies to the subchapter, keeps them within 30 days of the order for relief absent extraordinary circumstances. The monthly operating report begins here as well, or rather its obligation does: under Rule 2015(b), the Subchapter V debtor files a report on Official Form 425C for each calendar month, due 21 days after the end of the month following the month the report covers. March's report, in the hypothetical, is due May 21.

3. Days 21 to 40: The Meeting of Creditors

Rule 2003(a) requires the United States trustee to call the meeting of creditors between 21 and 40 days after the order for relief, which puts it between March 24 and April 12 in the hypothetical. The debtor is examined under oath, and section 1116(2) requires senior management and counsel to attend, along with the initial debtor interview the United States trustee schedules.

The meeting starts two further clocks (neither of which appears in the subchapter's own sections, and both of which a debtor can miss while attending to the ones that do, since the rules and the Code scatter them in places a small business owner reading only sections 1181 through 1195 would never look). Under Rule 1020(b), the United States trustee or a party in interest may object to the small business designation or the election within 30 days after the meeting concludes. And the utility question arrives early: section 366(c)(2) lets a utility alter or discontinue service in a Chapter 11 case if it has not received adequate assurance of payment, satisfactory to the utility, within 30 days after the petition, which in the hypothetical is April 2.

4. Fourteen Days Before the Conference: The Report on Consensus

Section 1188(c) requires the debtor to file and serve, at least 14 days before the status conference, a report detailing the efforts it has undertaken and will undertake to reach a consensual plan. If the court sets the conference on the last permitted day, May 2, the report is due by April 18.

The report is short. What it describes has to have happened.

5. Day 60: The Status Conference

Under section 1188(a), the court must hold a status conference no later than 60 days after the order for relief, to further the expeditious and economical resolution of the case. The court may extend that time only where the need traces to circumstances the debtor cannot fairly be blamed for, in the statute's more formal phrasing. In the hypothetical, the outer date is May 2.

The statute says little about what happens at the conference. Whether a court that finds no progress toward consensus at day 60 treats that as a warning or as a sign of a case already headed for cramdown is a matter the text leaves to the judge.

6. Day 90: The Plan

Section 1189(b) requires the debtor to file its plan no later than 90 days after the order for relief, and the same narrow standard governs any extension. The hypothetical date is June 1. Only the debtor may file it, and section 1190 requires it to recount how the business came to this point, to show what creditors would get in a liquidation, and to project whether the debtor can make the promised payments.

The plan is where the calendar was pointing all along. Everything filed on day zero, the schedules from day 14, the testimony at the meeting, and the months of operating reports are the material a creditor will set beside the projections, and any number in the plan that none of those documents supports will be the first thing asked about. You file the plan on day 90, but you have been writing it since the petition.

What the Calendar Looks Like Before Day Zero

A business facing a levy, a frozen account, or a lawsuit about to become a judgment may need the petition filed now, and that decision belongs with bankruptcy counsel. For an owner who still has time, the weeks before any filing are the one period with no statutory clock at all.

Delancey Street works in those weeks. It negotiates merchant cash advances and other business obligations outside of court; as a company that is not a law firm, it neither prepares petitions nor calculates bankruptcy deadlines, and legal questions go to independently licensed attorneys. It will review the contracts and balances without charge and in confidence, which can show whether an agreement is realistic before the calendar starts.

The subchapter's deadlines were written for companies that would rather be running than filing. Ninety days is enough for that, if the books were ready on day zero.