Small business debtor duties: records that keep the case moving

The filing package is only the beginning

Small business bankruptcy procedures can reduce some burdens, but they do not remove the need for reliable records. Section 1116 specifies duties in a small business case. Section 1187 applies specified requirements to a debtor proceeding under Subchapter V. Eligibility and the applicable case designation should be confirmed before using either provision as a checklist.

The required financial information can include the most recent balance sheet, statement of operations, cash-flow statement, and federal income tax return, or the statutory statement about documents not prepared or returns not filed. A missing record should be addressed accurately, not replaced with an invented historical figure.

Assign recurring work to named people

Section 1116 also addresses attendance at specified meetings, schedules and statements, postpetition reports, customary and appropriate insurance, tax filings and payments, and access to business records and premises. Some duties are expressly subject to cash-collateral restrictions. Accounting, legal, and management teams therefore need a shared timetable.

An illustrative contractor may have outsourced bookkeeping but retain responsibility for supplying job-cost information. Identify who provides the underlying data, who reconciles it, and who reviews a filing. An external accountant cannot produce reliable reports from transactions that nobody has recorded.

Distinguish a forecast from a filed report

A cash forecast is a planning tool. A required report describes information in the form and period the applicable rules demand. Reusing a forecast without reconciling actual results can leave important inconsistencies. Keep the supporting bank records, payroll information, receivables, and tax documents available for review.

A simple exception log can record missing statements, unreconciled balances, upcoming insurance renewals, and disputed taxes. It should identify a responsible person and a resolution date. The goal is to make problems visible while they can still be addressed through the proper process.

A monthly control meeting can cover

• Required filings, supporting records, and actual deadlines.
• Insurance coverage and renewal dates.
• Tax returns, current obligations, and any documented disputes.
• Differences between actual performance and the case forecast.