NACM survey: "fast-track" bankruptcy proceedings uncommon.(TRADELINE)(national association of credit management)

Results from NACM's online survey from May show that the "fast-track" provisions included in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that allow for expedited bankruptcy proceedings for small business debtors have largely gone unused. When asked "Have you dealt with a debtor going through a 'fast-track' bankruptcy, the provisions under BAPCPA which allow expedited proceedings for Chapter 11 small business filings?," 95.1% replied "no" and only 4.9% responded "yes."

According to one respondent who had recently gone through their first "fast-track" bankruptcy, the court issued a settlement to all unsecured creditors within three months of the debtor's filing, which was pending an anticipated sale of the company at the end of 30 days. "The only option was to settle at 50% (pretty good concerning the circumstances) or try your luck at a Chapter 7," said the respondent. "Since the company was owned by a venture capital concern, we never did obtain any financials but were able to review them prior to receiving the fast-track claim. The courts gave us a week to decide." The respondent noted that the debtor had made payments within the 90-day preferential period and that their company provided a part that was critical ...