In re Packet Construction LLC
United States Bankruptcy Court for the Western District of Texas
No. 23-10860, 2024 WL 1926345 (2024)
- Written by Jamie Milne, JD
Facts
Packet Construction LLC (Packet) (debtor) filed for bankruptcy under Chapter 11 Subchapter V of the Bankruptcy Code, which provided a streamlined form of reorganization bankruptcy for small businesses. Packet submitted a proposed reorganization plan that addressed, among other things, payments to unsecured creditors. Based on Packet’s projected disposable income for the next five years, the plan included payments totaling $36,000 to unsecured creditors in the first year and up to $216,000 in year five. The Subchapter V trustee, a person appointed to facilitate negotiations between Packet and its creditors, objected to Packet’s proposed plan on the basis that it did not include a true-up provision, meaning a provision requiring an increase in the amounts paid to unsecured creditors if Packet’s actual disposable income during the five-year period exceeded its projections. The bankruptcy court considered the trustee’s objection.
Rule of Law
Issue
Holding and Reasoning (Bradley, J.)
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