Several interesting conclusions can be drawn from the data in Table 1. First, 38% of Missouri debtors achieved the ultimate objective in a Chapter 12 case, i.e. confirmation of a plan followed by entry of a Chapter 12 discharge. Tis percentage will likely increase as more debtors in the 28 pending cases complete their plan payments and receive a discharge.
Second, most Chapter 12 debtors are able to at least file a repayment plan. More than 80% of all Chapter 12 debtors propose a repayment plan at some point in their cases. More than 95% of all debtors who file a plan eventually convince a court to confirm it.
Tird, many Chapter 12 debtors fail to perform under their confirmed plans. Of the 107 closed cases where a plan was confirmed, no Chapter 12 discharge was entered in 43 of them. Terefore, about 40.1% of all confirmed plans result in a post- confirmation default that precludes entry of a discharge. Another interesting metric is comparing Missouri Chapter 12 outcomes with Chapter 12 outcomes nationwide. Although there is no readily available data for nationwide Chapter 12 outcomes for 2000 through 2020 inclusive, the Executive Office of the United States Trustee published case outcomes for 1,809 Chapter 12 cases that were closed nationwide in fiscal years 2009-2014.
Table II compares Missouri’s experience with the nationwide data where available.
Outcome
entered
and entry of discharge
entry of discharge
Missouri (2000-2020) 38.1%
Nationwide (2009-2014) 41.9%
4.88 years 4.76 years 5.18 years 5.02 years
Terefore, Missouri debtors have on the average a slightly less positive set of outcomes than Chapter 12 debtors nationwide. Successful Missouri cases proceed at a slightly slower pace than their counterparts nationwide.
TIMING CONSIDERATIONS Under Section 1221, a Chapter 12 debtor must file a plan within 90 days aſter the petition date. Te court can extend the filing period if it concludes that the need for an extension is “attributable to circumstances for which the debtor should not justly be held accountable.” For the most part, the Missouri Chapter 12 debtors filed their plans on a timely basis as the median number of elapsed days between the petition date and the date of the first plan was only 96 days. Te median number of days between the petition date and entry of a confirmation order is 162 days. Most Chapter 12 debtors have to amend their original plan one or more times in order to secure confirmation.
CONCLUSIONS 1. While Chapter 12 is far from a cure-all, it does work a significant percentage of the time, as evidenced by the 38.1% of Chapter 12 debtors who obtain a discharge.
2. Chapter 12’s liberal rules governing amendments, both pre- and post-confirmation, are frequently used. Family farmers clearly need flexibility in proposing their plans and pursuing confirmation. A debtor’s need to file an amended plan is not necessarily an omen that the plan will ultimately fail. In many instances, a debtor was eventually able to obtain a discharge in spite of filing one or more post-confirmation amendments. Both debtors and lenders should recognize at the outset that a substantial number of confirmed plans require post- confirmation modification.
3. Missouri’s experience with Chapter 12 is very close to the nation as a whole. 4. Te influence of Chapter 12 is probably much more significant than the modest number of cases indicate. Te results in Chapter 12 cases provide a spectrum of potential outcomes that influence both lenders and borrowers in out- of-court workout discussions.
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THE MISSOURI BANKER 23
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