Free Reference Note — Updated April 2026
The Chapter 11
Pre-Filing CFO Prep Note
A working reference for middle-market operating companies with insider loans and customer prepayments thinking about Chapter 11 or Subchapter V. Written for CFOs and financial advisors by a former AlixPartners restructuring VP.
PDF download. No credit card. Updated with the January 2026 Sub V debt-cap adjustment and the pending S. 3977 Senate bill.
What's Inside the Note
The three insider-loan risks that get insiders paid zero: preference, recharacterization, and equitable subordination
Pre-filing documentation checklist (promissory notes, board resolutions, AFR interest payments, UCC-1 filings)
Customer prepayment / deferred revenue treatment at the petition date
First Day Motions that keep the business operating (customer programs, cash management)
13-week cash flow framing and the liquidity-illusion trap for prepayment-based businesses
Subchapter V debt cap math — current $3,424,000 figure and the pending S. 3977 legislation
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Who Is This For?
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Bankruptcy Attorneys
Want a CFO-side checklist to hand to the financial advisor or in-house finance lead before the first intake call.
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Fractional CFOs
Working with a closely-held client facing Chapter 11 and need a reference note for the pre-filing window.
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Owner-Operators
Running a family business with insider loans and customer prepayments, thinking about what to prepare now.
“The two-to-six-week window before a Chapter 11 filing is where insider loans either get protected or get written off, and where the deferred-revenue math decides whether Subchapter V is even on the table. This note is the checklist I actually use with clients in that window.”
— Juwon Lee, Former restructuring VP at AlixPartners
This prep note is general reference material for educational and discussion purposes. It is not legal, tax, or investment advice, and does not create an attorney-client or advisor-client relationship. Specific fact patterns require specific professional counsel.