Lear Capital Agrees to Creditor Group in Subchapter V Bankruptcy

Coin dealer Lear Capital Inc. agreed to a deal allowing the appointment of a formal creditors’ committee in its small business bankruptcy case, giving customers more leeway to investigate allegations of predatory business practices.

Lear’s settlement is unusual because the company filed for bankruptcy under Subchapter V of Chapter 11—part of a 2020 law to help small businesses—and creditor committees are nearly non-existent in the relatively new option.

The subchapter, which was added to the bankruptcy code through the Small Business Restructuring Act, has gained popularity among small companies because it allows them to restructure their debts with much less ...