Debtor-in-Possession representation in Chapter 11.

Chapter 11 provides businesses means by which they can reorganize under protection of the Bankruptcy Court. Chapter 11’s are theoretically available to individuals and to small businesses, but generally works better for larger corporations. Chapter 11’s often fail, or if they succeed at such a high price that our clients found the process not worth the effort, unless the debt involved is at least $5 million.

However, on August 23, 2019, Congress created a new form of Chapter 11, designated as Chapter 11, Subchapter V) designed for small businesses, but available to individual debtors (whether in business or not).  Subchapter V cases are available to Debtors who have small total debts, specifically, under $7,500,000, although this limit is set to and may change in 2024 .  Subchapter V cases are much easier and less expensive than traditional, chapter 11’s under the “old” law.  

This office has handled a number of significant Chapter 11 cases, under the “old” law,  including, In Re: Loron Williams, a farm bankruptcy case, thought to have been the largest in the Middle District of Georgia at the time,  In Re: Nidrah Plantation, Inc., another farm case, In Re: M&R Real Estate, LLC, In Re: RWD Real Estate, LLC ( part of the Rob Doll Nissan cluster of cases), In Re: Goldens’ Foundry and Machine Company, Inc., and In re Harvey Lumber Company.

This office has also handled both of the two Subchapter V cases, under the “new” law,  that have been filed in the Columbus Division. Both were more complicated cases, involving substantial litigation,  but both resulted confirmed plans, with the Debtor’s in continuous operation. These were In re H. Edward Paris, DdS, P.C. and In re Motormax Financial Services Corp.

Committee representation in Chapter 11.

When a traditional Chapter 11 case (under the “old law” is filed, creditors, as a class of interests, are entitled to representation. Creditors may form one or more official committees, which are authorized to take official positions in the bankruptcy case. They also may file, without necessity of court authority, one or more “ad hoc” or unofficial committees, which can take a position in a bankruptcy case to the extent that any one individual creditor  could. This has the effect of allowing creditors to pool resources and get representation that one creditor might not be able to afford.

This office has represented official creditor committees in In Re: Lummus Industries, Inc., In Re: Pascoe Building Systems, In Re: Segall & Sons, In Re: Rental Supply Company.

This office has also represented unofficial or ad hoc committees and former employees in In Re: Tom’s Foods, Inc., and In Re, Johnston Industries, Inc.

Trustee Appointment and Representation.

When a Chapter 7 bankruptcy case is filed, the Court appoints an “interim” trustee, but the creditors may, if they wish, vote to appoint a private trustee. This office has acted as a private trustee in a number of Chapter 7 bankruptcy cases, including, In Re: Zeferino Lucio-Anaya, a case in which over $8 million was recovered for payment of creditor claims, and In re Winslett, a case in which over $4 million was recovered for payment of creditor claims.

Additionally, this office has represented a number of trustees in other bankruptcy cases where the interim trustee was appointed as the final trustee, and there was no election, and the trustee engaged it as special counsel.

Prosecution and Defense of Preference Cases.

When a bankruptcy case is filed either under any chapter, including Chapter 7 or Chapter 11, the debtor is required to report to the Court payments made to creditors within one year of case filing. If the payments made to creditors were not fair, made in equal proportions to all the creditors, then those creditors who have received more than their fair share can be required to pay money back through “preference recoveries” under 11 U.S.C. §547.

Preferences are frequently brought in both Chapter 11 cases and Chapter 7 cases by trustees, and this office has prosecuted or defended at least two hundred (200) preference cases, for Debtors or Trustees.  

Other Commercial and Business Litigation.

This office has prosecuted and defended a number of state and federal court claims arising out of defaulted debts and failed companies, other than preference suits mentioned in the preceding section. This practice includes defense of debt cases, prosecution of debt cases, and debt collection cases, where the amount in controversy is at least $15,000.00.

Representation in Involuntary Bankruptcy Proceedings.

Bankruptcy cases may be brought by creditors, wishing to force a debtor to liquidation, through the involuntary bankruptcy process. This office has prosecuted or defended numerous at least a half dozen  such cases, including a successful case against one publicly traded  company and the successful defense of another publicly traded company

Consumer Bankruptcy.

This office maintains a limited practice in the area of consumer bankruptcy, typically under Chapter 13 which is a procedure that allows individuals with relatively small debts to restructure much like a business can restructure under Chapter 11. Chapter 13 is also available for very small businesses, and this office has handled at least 50 such small business chapter 13 cases.   True consumer bankruptcy cases (those where the Debtor is a wage earner) are accepted on a case-by-case basis, and at a substantial reduction from regular hourly rates, we consider this to be a pro bono effort. 

Alternative Dispute Resolution. Fife M. Whiteside is a Georgia licensed and certified mediator and arbitrator, and frequently provides mediation services in debt or commercial and bankruptcy cases, including trustee cases where settlements of preference or fraudulent transfer claims over $1,000,000 have been accomplished. He also is trained and qualified in collaborative law practice.