Chapter 11 Small Business Cases

Rev. 5/30/2018


Fed. R. Bankr. P. 1020



A small business case is defined as a case with a "small business debtor." 11 U.S.C. § 101(51C). Determination of whether a debtor is a "small business debtor" requires application of a two-part test.


First, the debtor must be engaged in commercial or business activities (other than primarily owning or operating real property) with total non-contingent liquidated secured and unsecured debts of $2,323,300.00 or less.


Second, the debtor's case must be one in which the U.S. trustee has not appointed a creditors' committee, or the court has determined the creditors' commit tee is insufficiently active and representative to provide oversight of the debtor. 11 U.S.C. § 101(51D).




Election to be a Small Business Debtor


  • For cases filed on 10/17/2005 and after, the debtor must identify themselves as "small business" on the voluntary petition.   

  • In an involuntary chapter 11 case, should the debtor elect to be a small business debtor, the debtor must file a statement (Debtor's Election of Small Business Designation) within 14 days after entry of the order for relief. See Fed. R. Bankr. P. 1020(a)  

  • Objection to Small Business Debtor Designation – the US Trustee or a party in interest may file an objection to the debtor’s statement not later than 30 days after the conclusion of the meeting of creditors, or within 30 days after any amendment to the statement, whichever is later. See Fed. R. Bankr. P. 1020(b)

  • If an unsecured creditors committee has been appointed under 11 U.S.C. § 1102(a)(1), the case shall proceed as a small business case only if, (and from the time when) the court enters an order determining that the committee has not been sufficiently active and representative to provide effective oversight of the debtor and the debtor meets all other requirements for being a small business.   The US Trustee or a party in interest may file a Request for Determination within a reasonable time after failure of the committee to be sufficiently active.  The Debtor may file a Request for Determination at any time. See Fed. R. Bankr. P. 1020(c)

  • Objections or Requests for Determinations under Fed. R. Bankr. P. 1020, are governed under Fed. R. Bankr. P. 9014 and must be served on the debtor; debtor’s attorney; US Trustee; the  trustee (if applicable); any committee appointed under 11 U.S.C. § 1102 (creditors' and equity security holders' committees) or its authorized agent, or, if no committee of unsecured creditors has been appointed under 11 U.S.C.  §  1102, the creditors included on the list filed under Fed. R. Bankr. P. 1007(d) (20 largest unsecured creditors list); and any other entity as the court directs.  See Fed. R. Bankr. P. 1020(d)

  • The debtor in possession or a trustee must append to the voluntary petition [or, in an involuntary case, file not later than 7 days after entry of the order for relief]  the most recent: See 11 U.S.C. § 1116 (1)

    • balance sheet;

    • statement of operations,

    • cash-flow statement

    • Federal tax return; or

    • a statement (under penalty of perjury) that no balance sheet, statement of operations or cash-flow statement has been prepared and no Federal tax return has been filed.

  • The Court may grant, after notice and hearing, an extension of time to file all schedules and statement of financial affairs, but shall not extend such time period to date later than 30 days from the date of the order for relief (absent extraordinary and compelling circumstances). See 11 U.S.C. § 1116(3)

  • Small business debtors are required to file periodic financial and other reports containing information, including the information listed in paragraphs (1) through (4) of § 308(b). See 11 U.S.C. § 308  

Plan & Disclosure Statement


  • Only the debtor may file a plan during the first 180 days of a small business case.  See 11 U.S.C. § 1121(e). This "exclusivity period" may be extended by the court, but only to 300 days, and only if the debtor demonstrates by a preponderance of the evidence that the court will confirm a plan within a reasonable period of time.

  • Disclosure statement may not be required if the Court determines the plan contains adequate information.  See 11 U.S.C. 1125(f)(1)


Disclosure Statement Hearings and Plan Confirmation


  • The court may, upon application of the plan proponent or on its own initiative, conditionally approve a disclosure statement and combine the hearing on approval of disclosure with the hearing on confirmation of the plan.

  • The plan must be confirmed within 45 days of filing of the plan unless extended. See 11 U.S.C. § 1129(e).  An extension may be granted only on motion and notice of the debtor.   See 11 U.S.C. § 1121(e)(3)  

  • Acceptance of Plan may be based upon a conditionally approved Disclosure Statement if mailed to claimants not later than 25 days prior to the confirmation hearing.