March 2026: Recent Developments in Corporate Bankruptcy and Restructuring

In an effort to keep you apprised of what’s happening in the realm of bankruptcy and restructuring, here are four recent developments to be aware of.

1. Bankruptcy filings continued to rise in March, with Subchapter V filings showing particular strength in both the month and the first quarter. According to Epiq AACER data, total bankruptcy filings in March 2026 increased 16 percent year over year, while total commercial filings increased 5 percent. Subchapter V elections within chapter 11 increased 48 percent in March, from 183 to 271. Looking at the full first quarter, Subchapter V elections increased 67 percent year over year, from 499 to 833, while total commercial bankruptcies rose 14 percent and commercial chapter 11 filings rose 37 percent. The numbers continue to suggest that financial stress remains real across the market, and that more small businesses are turning to the streamlined Subchapter V process as pressure builds.

2. Congress is again pushing to expand access to Subchapter V. Bipartisan legislation introduced in both the House and Senate would permanently raise the debt-eligibility cap for Subchapter V cases to $7.5 million. That higher threshold had been available on a temporary basis during and after the pandemic, but it expired in June 2024. Since then, the cap has reverted to a much lower level, leaving many distressed small businesses outside the reach of Subchapter V’s faster and often more practical restructuring framework. ABI has backed the legislation and said that a meaningful number of would-be debtors likely missed the opportunity to use Subchapter V after the higher threshold expired.

3. The Supreme Court ruled that motions to set aside a void judgment still must be made within a “reasonable time.” In Coney Island Auto Parts Unlimited, Inc. v. Burton, the Court held that Rule 60(c)(1)’s reasonable-time requirement applies even when a party seeks relief under Rule 60(b)(4) on the ground that the judgment is void. The case arose out of a bankruptcy adversary proceeding in which a defendant argued, years later, that a default judgment was void because service had been improper. The Court rejected the view, adopted by many lower courts, that void judgments could be challenged at any time. The decision is a reminder that even arguments framed in jurisdictional or due-process terms may be subject to meaningful procedural limits.

4. Bankruptcy venue reform is back on the table in Congress. Representatives Zoe Lofgren and Ben Cline recently introduced the bipartisan Bankruptcy Venue Reform Act, which is aimed at curbing forum shopping in large chapter 11 cases. As introduced, the bill would generally require a company to file where it has its principal place of business or principal assets, rather than allowing venue to rest on incorporation in a favored jurisdiction. It would also narrow the affiliate-filing rule, restrict last-minute asset or entity manipulation designed to manufacture venue, and require courts to act more quickly on venue objections. The bill is not new in concept, but renewed attention to perceived venue gamesmanship in recent large cases may give the effort more momentum this time around.