Publication Date
2-27-2026
Document Type
Casenote
Abstract
For small businesses facing financial disarray, the federal bankruptcy system offers a way to bounce back and get a second chance. However, not all mistakes can be forgiven, and some debts must be paid. As Congress adapts and expands the Bankruptcy Code, interpretive issues can arise, making it difficult for creditors and debtors to understand their options and outlook. In 2019, Congress attempted to create a more flexible and forgiving option for small businesses when they enacted the Small Business Reorganization Act (“SBRA”), which created Subchapter V of Chapter 11 of the Bankruptcy code. This subchapter has given rise to dispute regarding the debts that can and cannot be discharged.
In the case In re 2 Monkey Trading, LLC, the United States Court of Appeals for the Eleventh Circuit addressed the primary dispute arising from Subchapter V: whether the limitations of 11 U.S.C. § 523(a) apply to corporate small business debtors who file bankruptcy under Subchapter V. In a controversial ruling, the Eleventh Circuit decided that the restraints imposed by § 523(a) do apply to corporate small businesses. This decision deepens the circuit split on the issue, provides creditors with greater protections and leverage in bankruptcy proceedings, and has left many bankruptcy professionals with a bad taste in their mouths.
Recommended Citation
Wright, Cole
(2026)
"No More Monkeying Around: The Eleventh Circuit Deepens the Circuit Split on Corporate Discharge Under 11 U.S.C. § 1192,"
Mercer Law Review: Vol. 77:
No.
2, Article 14.
Available at:
https://digitalcommons.law.mercer.edu/jour_mlr/vol77/iss2/14