II. DEBTOR'S ELECTION OF SUBCHAPTER V AND DEFINITION OF A DEBTOR ELIGIBLE FOR SUBCHAPTER V
A. Elective Designation
Participation in Subchapter V is elective. If a debtor does not designate a case as a Subchapter V case, and the debtor otherwise falls within the definition of "small business debtor," the case proceeds as a "small business case." The SBRA does not specify how or when a debtor makes an election. The general practice is for a debtor to state on the petition whether it is a small business debtor or a Section 1182(1) debtor and whether it does or does not make the election.
Parties in interest may object to a debtor's statement of whether it is a small business debtor. Bankruptcy Rule 1020(b) requires an objection to a debtor's statement of its small business status within 30 days after the later of the conclusion of the Section 341(a) meeting or amendment of the statement. Interim Rule 1020(b) makes the same requirement applicable to the statement regarding the Subchapter V election. Courts have concluded that the debtor has the burden of proving eligibility for Subchapter V relief. A bankruptcy court's determination of a debtor's eligibility to proceed under Subchapter V may be the proper subject of an interlocutory appeal under 28 U.S.C. § 158(a)(3).
Bankruptcy Rule 1009(a) gives...
