Seven Stars on the Hudson Corp, 618 B.R. 333

Debtor Seven Stars on the Hudson Corp. (a trampoline-park operator) filed Chapter 11 on June 5, 2019 as a small-business debtor and leased premises from MDG Powerline Holdings, LLC (MDG).
Litigation with franchisor Rockin’ Jump was resolved; assumption of the MDG lease was litigated and the Court granted assumption on June 1, 2020 but required approximately $130,000 in accrued post-petition rent to be paid as an administrative expense on the effective date of any confirmed plan.
On June 19, 2020 (over one year after the order for relief), Seven Stars amended its petition to elect Subchapter V status; however, Subchapter V requires a status conference within 60 days and a plan within 90 days of the order for relief, deadlines that had long expired.
The Court issued a show-cause order to dismiss under 11 U.S.C. § 1112(b)(4)(J) for failure to file a plan within the time fixed by the Code; the debtor and the Subchapter V trustee opposed dismissal, MDG supported dismissal.
The core legal dispute concerned (1) whether a debtor may amend its petition to elect Subchapter V in a pending case and (2) whether the Subchapter V statutory timelines can be applied or extended when the election is made after those deadlines have passed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
May a debtor amend a pending petition to elect Subchapter V?	Rule 1009 and Interim Fed. R. Bankr. P. 1020 permit amendment to elect Subchapter V.	Opponents stress retroactivity, vested rights, and limits of statute.	Amendment is permitted by the Rules, but the election does not change the original order-for-relief date.
Do the Subchapter V 60/90–day timelines apply when election occurs after they expired?	Debtor and some cases allow late election and continuation under Subchapter V.	Expired deadlines are mandatory; debtor cannot obtain Subchapter V benefits after deadlines without meeting extension standard.	The statutory timelines apply; electing after they expired puts the debtor in default.
Can the court extend the 60/90–day deadlines when election is post-deadline?	COVID-19 and other equities justify extension; court has discretion to extend.	The extension standard is strict; debtor caused the default by electing late and should be held accountable.	Extension requires circumstances beyond the debtor’s control; election after the deadline is not such a circumstance, so no extension was warranted.
Remedy for failure to file a plan within time fixed by the Code?	Debtor and trustee opposed dismissal and urged accommodation.	Creditor (MDG) sought dismissal under § 1112(b)(4)(J).	The case was dismissed under § 1112(b)(4)(J).

In re Pier 1 Imports, Inc., 615 B.R. 196 (Bankr. E.D. Va. 2020) (COVID-era analysis of post‑petition rent and assumption issues)
In re Ventura, 615 B.R. 1 (Bankr. E.D.N.Y. 2020) (permitted election of Subchapter V in a pending case)
In re Progressive Solutions, Inc., 615 B.R. 894 (Bankr. S.D. Cal. 2020) (allowed late Subchapter V election in pending case)
In re Body Transit, Inc., 613 B.R. 400 (Bankr. E.D. Pa. 2020) (analyzed retroactivity and eligibility under the SBRA)
In re Double H Transportation LLC, 614 B.R. 553 (Bankr. W.D. Tex. 2020) (addressed conversion/eligibility issues under Subchapter V)
In re Bello, 613 B.R. 895 (Bankr. E.D. Mich. 2020) (permitted post-conversion election to proceed under Subchapter V)
In re Travel 2000, Inc., 264 B.R. 444 (Bankr. W.D. Mich. 2001) (discussed Bankruptcy Code balance between debtor relief and creditor protection)