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Chapter 11 of the Bankruptcy Code was enacted to provide financially troubled businesses an opportunity to reorganize by restructuring bank debt, discharging trade debt, and rejecting burdensome contracts and leases. Over the years it became clear that, while the statute worked well for large enterprises, chapter 11 was simply too expensive for small businesses to utilize effectively. The reporting obligations, statutory hurdles to confirm a plan, and litigious nature of the process caused many small businesses [...]

When chapter 11 cases with multiple debtors are converted to chapter 7, one of the biggest challenges facing trustees is the task of accurately demarcating co-mingled assets to determine the appropriate allocation to creditors of each estate. Substantive consolidation of assets - the merging of assets and liabilities from multiple related debtors into one pool from which creditors are paid ratably - remains a strategic, yet less commonly used legal remedy that trustees and professionals [...]

Businesses that were already struggling before the COVID-19 pandemic hit the United States are now facing the consequences of having to close their doors during the public health crisis. In May 2020, J. Crew Group, Neiman Marcus and JCPenney all filed for bankruptcy within weeks of each other. Even before the current market conditions set in, lenders and landlords had been scrambling to keep up with the deluge of retail lease workouts and bankruptcy filings. [...]