“In addition to the increased speed, Subchapter V eliminates several requirements that provided negotiating leverage to creditors in the planning process.” whether this creativity constituted improper “gerrymandering.” In Subchapter V, the debtor can confirm a plan even if all creditors vote “no” if certain other requirements are met. In short, Subchapter V makes it easier for the small business debtor to “cram down” a plan on its creditors. Accordingly, lenders must be prepared to act fast and re-examine existing (even if seldom used) provisions of the Bankruptcy Code to either reclaim leverage in plan negotiations and/or prevent the confirmation of an unacceptable plan. Further, a lender should be prepared to work with its borrower and the newly created Subchapter V trustee to see if a consensual plan may be reached. Conclusion Subchapter V is designed to be fast-moving and supportive of a debtor’s reorganizational efforts. Lenders should be careful not to sit back and “wait and see” what happens but should be prepared to work proactively in order to secure their rights and treatment. Failure to do so may result in a loss of negotiating leverage and/or an unacceptable modification of the loan being “crammed down” upon the lender. ■ Spencer Fane attorneys Eric Johnson and Elizabeth Lally can be reached at ejohnson@spencerfane.com and elally@spencerfane.com, respectively. Are you ready for growth? Advertise in this magazine and watch your revenue soar. A place where your company gets wings! Contact us today to get your spot. 801.676.9722 | 855.747.4003 sales@thenewslinkgroup.com 2023 Issue 2 | 15
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