In this post, I’ll continue in my effort to provide, in a single post, short summaries of each month’s notable Subchapter V opinions from across the country. Rather than all-encompassing summaries, I’ll provide a roadmap of the issues and then you can click the opinions if you want to dig deeper. Here are the July 2023 Subchapter V opinions. Assuming my search was thorough enough, there were only two opinions in July:

1. In re Off-Spec Sols., LLC (9th Cir. B.A.P. Jul. 6, 2023)

In Off-Spec, the 9th Circuit BAP affirmed the Idaho Bankruptcy Court’s conclusion that § 523’s nondischargeability provisions are inapplicable to corporate Sub V debtors, despite language in § 1192 that the Fourth Circuit keyed-in on to hold that those provisions do apply to corporate Sub V debtors. Of course they don’t apply. I’m surprised this is an issue.

Anyway, the 9th Circuit BAP joins a long list of courts that I linked to last month that have held that § 523 applies to individual debtors, only, regardless of the chapter. If you care to read it, then click the link above. It’s a dense and thorough statutory and policy analysis.

2. In re Mateos (Bankr. M.D. Fla. July 28, 2023)

In Mateos, Judge Roberta Colton (see bonus coverage below) granted the individual debtors’ request under § 1189(b) to extend their deadline to file their Sub V plan. The court was careful to recognize that § 1189(b) is more exacting than the standard for regular extensions of time—it requires a showing that the “need for the extension is attributable to circumstances for which the debtor should not justly be held accountable.”

However, Judge Colton granted the motion because (i) the Sub V debtors’ finances were so intertwined with and dependent on a related, non-Sub V debtor’s finances and (ii) the related debtor’s settlement and plan (which involved the Mateos’s) depended on an SBA approval process over which the Mateos’s had no control. And thus, given the short length of the extension and how it aligned the debtors’ plan deadlines, she granted the motion.

Bonus: Since July didn’t produce many Sub V opinions, I’ll use the extra space to tell a story and make fun of myself. Judge Colton, as I should have known already but learned the awkward way, is a brilliant and formidable judge of national reputation.

As it went, my partner Dan and I had Judge Colton in a routine Sub V hotel case in Jacksonville in 2022. At the too-contested confirmation hearing, with our appraiser testifying, she politely interrupted to say, and I paraphrase, “Gentlemen, I’ve probably read thousands of appraisals during my career. Thus, it’s hardly essential that you have this witness testify about what the term ‘fair market value’ means.” It was part of a brilliant strategy, but ouch!

Anyway, I was humbled but impressed when I learned later that week that at the same time that Judge Colton was giving our little hotel case hours of mind-numbing attention as we slogged through testimony, she was also juggling slightly more important, national issues (i.e., serving on the Mediation Team for the Title III Cases that are the Puerto Rico Power Authority saga). Lesson: Always know your judge.

That’s it. Stay tuned for the August Sub V case summaries.

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