How Strict is 11 U.S.C. § 1189(b)’s 90 Day Subchapter V Plan Filing Deadline?

11 U.S.C. § 1189(b) requires the debtor to file a plan “not later than 90 days after the order for relief under this chapter, except that the court may extend the period if the need for the extension is attributable to circumstances for which the debtor should not justly be held accountable.  While we suspect the answer to this question must be resolved on a case-by-case basis with attention to the specific facts and circumstances of each case, this question is pending before at least one Chapter 11, subV case in Boston with which Amann Burnett, PLLC is involved so stay tuned.

The question to consider under § 1189(b) is whether “the debtor is fairly responsible for his inability to timely . . . file a plan” or if the need for an extension “appears fairly attributable to factors outside of his control”). See In re Wetter, 620 B.R. 243 (Bankr. W.D. Va. 2020) ((quoting In re Trepetin, 617 B.R. 841, 843-44, 849 (Bankr. D. Md. 2020)). See also In re Seven Stars on the Hudson Corp., 618 B.R. 333, 346 (S.D. Fla. 2020); In re 5 Star Prop. Grp. (Bankr. M.D. Fla. 2021).  And even if cause exists for dismissal or conversion, is 1189 (b)’s “circumstances for which the debtor should not justly be held accountable” tantamount to “unusual circumstances” under § 1112(b)(1)?  See 11 U.S.C. § 1112(b)(1).  Hoover v. Harrington (In re Hoover), 828 F.3d 5 (1st Cir. 2016).

Section 1112(b) does not define “unusual circumstances,” but the phrase contemplates conditions that are not common in chapter 11 cases.  In re Fisher, No. 07-61338-11, 2008 WL 1775123, at *5 (Bankr. D. Mont. Apr. 15, 2008).  See also, In re The 1031 Tax Group, LLC, 374 B.R. 78, 93 (Bankr. S.D.N.Y. 2007) (stating that “[t]he statute explicitly provides for this discretion where a court is able to identify ‘unusual circumstances . . . that establish that the requested conversion is not or dismissal is not in the best interests of creditors and the estate’”).