The Scope of the Subchapter V Corporate Debtor’s “Fresh Start”: The Eleventh Circuit Is Poised to Weigh In

The fifth anniversary of the effective date of The Small Business Reorganization Act of 2019 (SBRA) was February 19, 2025. This is a significant milestone in bankruptcy law as SBRA represents the most significant reform to Chapter 11 since the enactment of the Bankruptcy Code in 1978. SBRA created Subchapter V— a new tool for small businesses to rescue such businesses in financial distress. A significant body of caselaw has developed on a host of legal issues arising under SBRA over the last five years. One area that is evolving pertains to the scope of discharge available to small business corporate debtors under Subchapter V. This Article examines the caselaw that has developed within the Eleventh Circuit addressing the scope of the discharge for corporate debtors. The issue is now on appeal at the Eleventh Circuit Court of Appeals in the case of In re Monkey Trading. The pending appeal is considered and ramifications of such a decision on Subchapter V practice, as well as the potential split among the Courts of Appeals.