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Nov 27, 2023 · The proposed reorganization plan would be funded partially by $550,000 from Luftig and an agreement from him to pay $100,000 more.
In In re Hal Luftig Co., the Bankruptcy Court recommended confirmation of a subchapter V small business reorganization plan that provided for the nonconsensual release of a non-debtor third party5. The Bankruptcy Court applied the Purdue III factors when considering the release6.
In Re: 22-11617-jpm Hal Luftig Company, Inc. Memorandum Opinion And Order signed on 11/22/2023 On Confirmation Of Small Business Plan Of Reorganization Under Chapter 11. (related document(s) 55 , 90 , 63 , 85 , 84 )
Dec 2, 2023 · Judge Mastando found that “equity” supports confirmation of the plan with its non-debtor releases, in part because the owner and other creditors “will receive more under the Plan than in a chapter 7 proceeding, or in the event [the owner] filed for bankruptcy himself.”
Thus, with respect to nonconsensual third party releases, the Hal Luftig Co. District Court drew a line in the sand in favor of creditor protections over subchapter V’s goal of streamlining reorganization for small business debtors.
Pending before the Court is the request of Debtor Hal Luftig Company, Inc. (the “ Debtor ”) to confirm the Debtor’s Small Business Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (Docket No. 55)
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In this small business case, the Bankruptcy Court has recommended approval a plan of reorganization that contains a nonconsensual release of a non-debtor. For the following reasons, that recommendation is rejected. Background
