Effective today, the Small Business Reorganization Act of 2019 (SBRA) is live and taking cases. Thus, we figured that PACER would have much to report about such a potentially big day for small business debtors. In fact, we assumed that dozens of debtors, if not more, have been holding their breath since August 2019, hoping that they can bridge the gap to February 19, 2020. However, as of 11 p.m. EST, it appears to have been a big day for just one debtor: Michael and Gwatholyn Turney, the husband and wife owners of Papa Turney’s Old Fashioned BBQ in the Nashville, Tennessee area.
Specifically, at 12:08 CST, Gray Waldron of Dunham Hildebrand, PLLC filed, in the Middle District of Tennessee, the very first Subchapter V Chapter 11 ever. Gray and I shared a friendly email earlier this afternoon and like me, he’s hopeful that Sub V will benefit small business debtors and individual debtors in particular. I won’t pretend to understand what’s behind the filing. The 79 pages of schedules and statements speak for themselves. To put it in quick context, it appears that the Turneys’ DBA or LLC had gross revenues of $400,000 in 2019; the debts are less than $500,000; the debtors moved to pay the filing fee in installments; and Gray’s firm came into the case, after having received $1,000 in fees, with $2,065 in unpaid pre-petition fees, an unpaid balance that is not disqualifying under the SBRA’s employment exception for unpaid pre-petition fees up to $10,000. Such a humble and fitting start for the new Act.
The docket is notable because it provides a preview of how quickly the Sub V cases might move. The case was on the docket a little after midnight and, by 9:05 a.m. CST, the United States Trustee had filed his Notice of Appointment of Timothy Stone, of Newpoint Advisors, as the Sub V Trustee, who proposes to bill under § 330 at $295 per hour. (It will be interesting how economical these cases can be, if at all, if these panel (versus standing) Sub V Trustees are paid by the hour.) The IDI is set for February 25 and the 341 is set for March 19. And by 3:00 p.m. CST, Judge Harrison had already entered his order setting the mandatory status conference for April 14. So far, that’s a whipsaw of docket efficiency.
We wish Gray and the Turneys the best of luck under Sub V.
[Update: See our 02/20 post for an update about additionally-reported 2/19 Sub V filings.]