Phenomenon Marketing & Entertainment, LLC

I. Facts and Summary of Pleadings

The Act alters the definition of “debtor” for purposes of Subchapter V eligibility, and became law on June 21, 2022. The Act provides that the definitional change applies to any case commenced on or after March 27, 2020 that “is pending on the date of enactment of this Act.”6 Prior to enactment of the Act, any debtor that was an affiliate of an “issuer,” as defined in section 3 of the Securities Exchange Act of 1934 (the “Exchange Act”), was not eligible to proceed under Subchapter V.7 The Exchange Act defines an “issuer” as “any person who issues or proposes to issuer any security.”8 The Court found that the Debtor was not eligible to proceed under Subchapter V because it was an affiliate of entities who had issued securities.9 The Act broadens the scope of debtors who are eligible to proceed under Subchapter V. As opposed to excluding from eligibility a debtor who is an affiliate of an issuer, current law excludes only a “debtor that is an affiliate of a corporation” that is “subject to the reporting requirements under section 13 or 15(d)” of the Exchange Act.10 Put in plain language, only debtors who are affiliates of publicly-traded…