Unless creditors accept a debtor's plan of reorganization, bankruptcy law requires the plan to provide for the payment in full of creditors before owners of the debtor receive anything on account of their equity interest....more
In a recent decision, In re Castleton Plaza, LP, 2013 WL 537269 *1 (Feb. 14, 2013), the Seventh Circuit held that the absolute priority rule – which requires that creditors be paid in full before equity holders receive...more
Originally published in Law360, February 22, 2013.
As real estate markets continue to rebound, owners of single asset real estate properties are increasingly incentivized to devise bankruptcy strategies that allow them...more
Under the absolute-priority rule, unpaid creditors normally receive the equity in a reorganized business. If a plan of reorganization proposes a “new value” investment in exchange for equity, however, the rule does not...more
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