To be eligible for subchapter V, an entity or person must be engage in “commercial or business activities” and 50 percent or more of its debt must arise from commercial or business activities. To proceed under subchapter V, the debtor needs to elect so on its initial petition.
Debtor in Possession
Subchapter V allows the debtor to remain in possession of its assets and to operate it business and mange it affairs with the rights and powers of a trustee unless the Bankruptcy Court orders otherwise.
A subchapter V trustee is appointed in all subchapter V cases. The subchapter V trustee’s role is to assist the parties in achieving achieve a consenual subchapter V plan of reorganizaiton.