1.This Act may be cited as the
Small Business Jobs Preservation Act
of 2010
.
2.Small business
reorganizationChapter 11 of
title 11, United States Code, is amended by adding at the end the
following:
VReorganization of
a small business enterprise debtor
1181Applicability
of subchapterThis subchapter
shall apply only in those cases arising under this chapter in which a small
business enterprise debtor elects that this subchapter shall apply.
1182.Inapplicability
of other sections
(a)Sections 105(d), 1101(1), 1104, 1105, 1106, 1107, 1108,
1115, 1116, 1121, 1123(a)(8), 1123(b)(5), 1123(c), 1127, 1129(a)(15), 1129(b),
1129(c), 1129(e), and 1141(d)(5) of this title do not apply in a case under
this subchapter.
(b)Unless the court for cause orders otherwise, sections
1102, 1103, 1125 of this title do not apply in a case under this
subchapter.
(c)Special rule
for dischargeIf a plan is confirmed under section 1193(b),
section 1141(d) of this title shall not apply, except as provided in section
1194.
1183.In this subchapter—
(1)the term
small business enterprise debtor means a debtor—
(A)that is engaged
in commercial or business activities; and
(B)that has
aggregate noncontingent, liquidated, secured, and unsecured debts as of the
date of the order for relief—
(i)in an amount
equal to not more than $7,500,000 (excluding debts owed to 1 or more affiliates
or insiders); and
(ii)not less than 50
percent of which arose from the commercial or business activities of the
debtor; and
(2)the term
debtor in possession means the small business enterprise debtor,
unless removed as debtor in possession under section 1186(a).
1184.
(a)If the United States trustee has appointed an individual
under section 586(b) of title 28 to serve as standing trustee in cases under
this subchapter, and if such individual qualifies as a trustee under section
322, then such individual shall serve as trustee in any case under this
subchapter. Otherwise, the United States trustee shall appoint one
disinterested person to serve as trustee in the case or the United States
trustee may serve as trustee in the case, as necessary.
(b)The
trustee shall—
(1)perform the
duties specified in paragraphs (2), (5), (6), (7), and (9) of section 704(a) of
this title;
(2)perform the
duties specified in paragraphs (3), (4), and (7) of section 1106(a) of this
title, if the court, for cause and on request of a party in interest, the
trustee, or the United States trustee, so orders;
(3)appear and be
heard at any hearing that concerns—
(A)the value of
property subject to a lien;
(B)confirmation of a
plan filed under this subchapter;
(C)modification of
the plan after confirmation; or
(D)the sale of
property of the estate;
(4)ensure that the
small business enterprise debtor commences making timely payments required by a
plan confirmed under this subchapter;
(5)if the small
business enterprise debtor ceases to be a debtor in possession, perform the
duties specified in section 704(a)(8), paragraphs (1), (2), and (6) of section
1106(a) of this title, including operating the business of the small business
enterprise debtor;
(6)if there is a
claim for a domestic support obligation with respect to the small business
enterprise debtor, perform the duties specified in section 704(c); and
(7)facilitate the
development of a consensual plan of reorganization.
(c)Termination of
trustee serviceIf the plan of the small business enterprise
debtor is confirmed under section 1193(a), the service of the trustee in the
case shall terminate when the plan has been substantially consummated.
1185.Rights and
powers of a debtor in possessionSubject to such limitations or conditions as
the court may prescribe, a debtor in possession shall have all the rights,
other than the right to compensation under section 330 of this title, and
powers, and shall perform all functions and duties, except the duties specified
in paragraphs (2), (3), (4), and (6) of section 1106(a) of this title, of a
trustee serving in a case under this chapter, including operating the business
of the small business enterprise debtor.
1186.Removal of
debtor in possession
(a)On request of a party in interest, and after notice and a
hearing, the court shall order that the debtor shall not be a debtor in
possession for cause, including fraud, dishonesty, incompetence, or gross
mismanagement of the affairs of the debtor, either before or after the date of
commencement of the case, or for failure to perform the obligations of the
debtor under a confirmed plan.
(b)On
request of a party in interest, and after notice and a hearing, the court may
reinstate the debtor in possession.
1187.
(a)If
a plan is confirmed under section 1193(b) of this title, property of the estate
includes, in addition to the property specified in section 541 of this
title—
(1)all property of
the kind specified in such section that the debtor acquires after the date of
commencement of the case, but before the case is closed, dismissed, or
converted to a case under chapter 7 of this title, whichever occurs first;
and
(2)earnings from
services performed by the debtor after the date of commencement of the case,
but before the case is closed, dismissed, or converted to a case under chapter
7 of this title, whichever occurs first.
(b)Debtor
remaining in possessionExcept as provided in section 1186 of
this title, a confirmed plan, or an order confirming a plan, the small business
enterprise debtor shall remain in possession of all property of the
estate.
1188.Duties and
reporting requirements of small business enterprise debtor
(a)Upon electing to be a debtor under this subchapter,
the small business enterprise debtor shall file the documents required by
subparagraphs (A) and (B) of section 1116(1) of this title, whether or not such
debtor is a small business debtor.
(b)Other
applicable provisionsA small business enterprise debtor, in
addition to the duties provided in this title and as otherwise required by law,
shall comply with the requirements of sections 308 and paragraphs (2), (3),
(4), (5), (6), and (7) of section 1116 of this title, whether or not such
debtor is a small business debtor.
(c)Separate
disclosure statement exemptionIf the court orders under section
1182(b) that section 1125 of this title applies, section 1125(f) of this title
shall apply whether or not such debtor is a small business debtor.
1189.
(a)Only the small business enterprise debtor may file a plan
under this subchapter.
(b)The
small business enterprise debtor shall file a plan not later than 90 days after
the order for relief under this chapter, except that the court may extend that
period if the need for an extension is attributable to circumstances for which
the small business enterprise debtor should not justly be held
accountable.
1190.A plan filed under this
subchapter shall include a brief history of the business operations of the
small business enterprise debtor, a liquidation analysis, and projections with
respect to the ability of the small business enterprise debtor to make payments
under the proposed plan of reorganization.
1191.Deemed
acceptance of planFor
purposes of subsection (c) or (d) of section 1126 of this title, a holder of a
claim or interest shall be deemed to have accepted a plan, if the holder fails
to file a timely ballot after being notified by the small business enterprise
debtor of—
(1)the treatment
that such holder will receive under the proposed plan; and
(2)the consequence
under this section of the failure by the holder to file a timely ballot.
1192.The court shall
hold a status conference to further the expeditious and economical resolution
of a case under this subchapter, and to encourage and facilitate the attainment
of a consensual plan of reorganization.
1193.
(a)The
court shall confirm a plan under this subchapter only if all of the
requirements of section 1129(a), other than section 1129(a)(15), of this title
are met.
(b)Notwithstanding
section 510(a) of this title, if all of the applicable requirements of section
1129(a), other than paragraphs (8), (10), and (15) thereof, are met with
respect to a plan, the court, on request of the small business enterprise
debtor, shall confirm the plan notwithstanding the requirements of such
paragraphs, if the plan does not discriminate unfairly, and is fair and
equitable, with respect to each class of claims or interests that is impaired
under, and has not accepted, the plan.
(c)For purposes of this subsection, the condition that
a plan be fair and equitable with respect to each class of claims or interests
includes the following requirements:
(1)With respect to a
class of secured claims, the plan meets the requirements of section
1129(b)(2)(A).
(2)As of the
effective date of the plan—
(A)the plan provides
that all of the debtor’s projected disposable income to be received in the
3-year period, or such longer period not to exceed 5 years as the court may
fix, beginning on the date that the first payment is due under the plan will be
applied to make payments under the plan; or
(B)the value of the
property to be distributed under the plan in the 3-year period, or longer
period not to exceed 5 years as the court may fix, beginning on the date on
which the first distribution is due under the plan is not less than the
projected disposable income of the debtor.
(3)The small
business enterprise debtor will be able to make all payments under the plan, or
there is a reasonable likelihood that the small business enterprise debtor will
be able to make all payments under the plan, and the plan provides appropriate
remedies, that may include the liquidation of nonexempt assets, to protect the
holders of claims or interests in the event that the payments are not
made.
(d)Definition of
disposable incomeFor purposes of this subsection, the term
disposable income means the income which is received by the small
business enterprise debtor and which is not reasonably necessary to be
expended—
(1)for the
maintenance or support of the debtor or a dependent of the debtor or for a
domestic support obligation that first becomes payable after the date of the
filing of the petition; or
(2)for the payment
of expenditures necessary for the continuation, preservation, or operation of
the business of the debtor.
(e)Notwithstanding section 1129(a)(9)(A) of this title, a plan
that provides for the payment through the plan of a claim of a kind specified
in paragraph (2) or (3) of section 507(a) of this title may be confirmed under
section 1193(b) of this title.
1194.If the plan of the small business enterprise
debtor is confirmed under section 1193(b) of this title, as soon as practicable
after completion by the debtor of all payments due within the first 3 years of
the plan, or such longer period not to exceed 5 years as the court may fix,
unless the court approves a written waiver of discharge executed by the debtor
after the order for relief under this chapter, the court shall grant the small
business enterprise debtor a discharge of all debts provided in section
1141(d)(1)(A) of this title, and all other debts allowed under section 503 of
this title and provided for in the plan, except any debt—
(1)on which the last
payment is due after the first 3 years of the plan, or such other time not to
exceed 5 years fixed by the court; or
(2)of the kind
specified in section 523(a) of this title.
1195.
(a)Modification
before confirmationThe small business enterprise debtor may
modify a plan at any time before confirmation of the plan, but may not modify
such plan so that such plan as modified fails to meet the requirements of
section 1122 and section 1123 of this title, with the exception of subsection
(a)(8) of such section 1123. After the modification is filed with the court,
the plan, as modified, becomes the plan.
(b)Modification
after confirmationIf a plan has been confirmed under section
1193(a), the small business enterprise debtor may modify such plan at any time
after confirmation of such plan and before substantial consummation of such
plan, but may not modify such plan so that such plan as modified fails to meet
the requirements of section 1122 and section 1123 of this title, with the
exception of subsection (a)(8) of such section 1123. Such plan, as modified
under this subsection, becomes the plan only if circumstances warrant such
modification and the court, after notice and a hearing, confirms such plan, as
modified, under section 1193(a) of this title.
(c)Certain other
modificationsIf a plan has been confirmed under section 1193(b),
the small business enterprise debtor may modify such plan at any time within 3
years, or such longer time not to exceed 5 years, as fixed by the court, but
may not modify such plan so that such plan as modified fails to meet the
requirements of section 1193(b) of this title. Such plan, as modified under
this subsection, becomes the plan only if circumstances warrant such
modification and the court, after notice and a hearing, confirms such plan, as
modified, under section 1193(b) of this title.
(d)Holders of a
claim or interestIf a plan has been confirmed under section
1193(a), any holder of a claim or interest that has accepted or rejected such
plan is deemed to have accepted or rejected, as the case may be, such plan as
modified, unless, within the time fixed by the court, such holder changes the
previous acceptance or rejection of such holder.
1196.
(a)Retention and
distribution by trusteePayments and funds received by the
trustee shall be retained by the trustee until confirmation or denial of
confirmation of a plan. If a plan is confirmed, the trustee shall distribute
any such payment in accordance with the plan. If a plan is not confirmed, the
trustee shall return any such payments to the small business enterprise debtor,
after deducting—
(1)any unpaid claim
allowed under section 503(b) of this title;
(2)any payment made
for the purpose of providing adequate protection of an interest in property due
to the holder of a secured claim; and
(3)any fee owing to
the trustee.
(b)If a plan is confirmed under section 1193(b) of this title,
except as otherwise provided in the plan or in the order confirming the plan,
the trustee shall make payments to creditors under the plan.
(c)Payments prior
to confirmationPrior to confirmation of a plan, the court, after
notice and a hearing, may authorize the trustee to make payments to the holder
of a secured claim for the purpose of providing adequate protection of an
interest in property.
1197.Transactions
with professionalsNotwithstanding section 327(a) of this
title, a person is not disqualified for employment under section 327 of this
title, by a small business enterprise debtor solely because such person holds a
claim of less than $5,000 that arose prior to commencement of the
case.
.
3.
(a)Title 11, United States
Code, is amended—
(1)in section 103(h)—
(A)by striking Subchapter IV of
and inserting the following: “Subchapter—
(1)IV
of
; and
(B)by striking the
period at the end and inserting the following: “; and
(2)V of chapter 11 of this title applies only
in a case under chapter 11 concerning a small business enterprise debtor (as
defined in section 1183) in which such debtor elects that subchapter V of
chapter 11 shall
apply.
;
(2)in section
322(a), by inserting 1184,
after 1163,
;
(3)in section 326(a)
insert , other than a case under subchapter V of chapter 11
after 7 or 11
;
(4)in section 326(b)
insert subchapter V of chapter 11 or under
after In a
case under
;
(5)in section
347—
(A)in subsection
(a)—
(i)by
inserting 1196,
after 726,
; and
(ii)by
inserting subchapter V of chapter 11,
after chapter
7,
; and
(B)in subsection
(b), by inserting 1196,
after 1173,
;
(6)in section
363(c)(1), by inserting 1184, 1185,
after
1108,
;
(7)in section
364(a), by inserting 1184, 1185
after
1108,
;
(8)in section
523(a), by inserting 1194,
after 1141,
;
(9)in section
524—
(A)in subsection
(a)—
(i)in
paragraph (1), by inserting 1194,
after 1141,
;
and
(ii)in
paragraph (3), by inserting 1194
after
523,
;
(B)in subsection
(c)(1), by inserting 1194,
after 1141,
;
and
(C)in subsection
(d), by inserting 1194,
after 1141,
;
(10)in section
557(d)(3), by inserting 1184,
after 1104,
;
and
(11)in section
1146(a), by inserting or 1193
after 1129
.
(b)Title 28 United States
Code, is amended—
(1)in section
586(a)(3), by inserting (including subchapter V of chapter 11)
after 7, 11
;
(2)in section
586(b), by inserting subchapter V of chapter 11 or under
after
cases under
;
(3)in section
586(d)(1), by inserting subchapter V of chapter 11 or under
after cases under
each place that term appears;
(4)in section
586(e)—
(A)in paragraph (1),
by inserting subchapter V of chapter 11 or under
after
cases under
;
(B)in paragraph (2),
by inserting subchapter V of chapter 11 or under
after
cases under
each place that term appears; and
(C)by adding at the
end the following:
(5)In the event that the services of the
trustee are terminated upon substantial consummation under section 1184(c) of
title 11, the court shall award compensation to the trustee consistent with
services performed by the trustee and the limits on the compensation of the
trustee established pursuant to section 586(e)(1) of this
title.
;
(5)in section
589b—
(A)in subsection
(a)(1), by inserting subchapter V of chapter 11 or under
after
cases under
; and
(B)in subsection
(d)—
(i)by
inserting subchapter V of chapter 11 or under
after
trustees under
; and
(ii)in
the undesignated matter following paragraph (8), by inserting subchapter
V of chapter 11 or under
after cases under
; and
(6)in section
1930(a)(6), by inserting , other than under subchapter V of that chapter
11,
after chapter 11 of title 11
.