Farm Business Reorganization: Agriculture Finance, Chapter 12 Special Benefits, Novel Theory of Force Majeure

This CLE webinar will help prepare bankruptcy attorneys for the continuing wave of farm bankruptcies. The panel will review the unique features of agriculture finance, options for farms under Chapter 11 (including Subchapter V) and Chapter 12, and options for lenders, as well as discuss a novel theory of force majeure that could impact application of Bankruptcy Code Sections 365 and 502, as well as change force majeure jurisprudence generally. 

Farm and agricultural bankruptcies in 2025 were up 46% over the prior year, and have not shown signs of slowing. According to agriculture experts in a Feb. 3, 2026, letter to Congress, barely half of all farms will be profitable in 2026, the U.S. is running a historic agriculture trade deficit, and enhanced immigration enforcement and related policies are causing a shortage of reliable labor, in turn preventing farmers from fulfilling their contractual obligations.

Restructuring and bankruptcy practitioners would do well to understand farm financing, which is materially different from typical secured lending. Disputes among multiple lienholders and claimants over multiple crop years are not uncommon. Counsel should be prepared for more farm and agribusiness cases under Chapter 12, Chapter 11, and Subchapter V, depending on eligibility, as well as appreciating the various risks and benefits. Agricultural lenders can expect to be the targets of clawback actions.

The law created in these cases can be far-reaching. One legal analyst has suggested that Chapter 12 may be a proving ground for the novel theory that labor shortages caused by executive actions could qualify as acts of government sufficient to excuse contractual performance under force majeure provisions, affecting how courts apply Bankruptcy Code Section 502.

Listen as our expert panelists review important issues related to farm restructuring and bankruptcy so that practitioners will be equipped to handle the issues in these cases.