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Absolute Priority Rule Creditors

Dechert LLP

International Capital Markets Newsletter - October 2022, Issue 7: The Corporate Insolvency & Governance Act 2020

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As the UK teeters on the brink of what would appear to be an inevitable recession, new restructuring tools introduced in the UK in 2020 pursuant to the Corporate Insolvency & Governance Act 2020 (“CIGA”) will ensure that...more

Jones Day

Judgment Claim and Lien Securing It Were Properly Subordinated Under Section 510(b) of the Bankruptcy Code

Jones Day on

Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating claims asserted against a debtor by equity holders arising from...more

Dechert LLP

European Restructuring Update: France Introduces New Accelerated Safeguard Proceedings

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France has now introduced a new restructuring tool following the enactment of Ordinance 2021- 1193 (the “Ordinance”), which incorporates the Directive (EU) 2019/1023 on preventive restructuring frameworks (the “Directive”)...more

Neal, Gerber & Eisenberg LLP

Intellectual Property Licenses and Bankruptcy

The COVID-19 pandemic has already caused numerous companies to file for bankruptcy relief and will likely cause many more to do so. In this environment, it is particularly important for both licensees and licensors of...more

Rumberger | Kirk

Small Business Bankruptcy Reforms You Need to Know

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For many years, people associated with the bankruptcy system in the United States recognized the process didn’t work well for small business owners. Corporate reorganizations through the Chapter 11 process were cumbersome and...more

Jones Day

Fifth Circuit Suggests Claims for Make-Whole Amounts Should Be Disallowed

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The Situation On January 17, 2019, the Fifth Circuit strongly suggested that claims for make-whole damages be characterized as "unmatured interest" and that claims for postpetition interest on unsecured debt be limited in...more

Sheppard Mullin Richter & Hampton LLP

Lehman Ruling Sets Stage For Future Subordination Contests

In the case In re Lehman Brothers Holdings Inc., 855 F.3d 459 (2d Cir. 2017), the U.S. Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Brothers employees for...more

Kramer Levin Naftalis & Frankel LLP

Delaware Bankruptcy Court Approves Separate Classification and Disparate Gifted Consideration Between General Unsecured Creditors

The Delaware Bankruptcy Court, in In re Nuverra Environmental Solutions, Case No. 17-10949 (Bankr. Del. July 24, 2017), confirmed a chapter 11 plan of reorganization despite separate classification and disparate gifted...more

Jones Day

In Brief: Second Circuit Reaffirms Broad Scope of Bankruptcy Code’s Subordination of Shareholder Claims

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Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders...more

Buchalter

Good News for Creditors in Individual Bankruptcy Cases

Buchalter on

For the past several years, creditors in the Ninth Circuit were confounded by an interpretation of the bankruptcy code that permitted individual chapter 11 debtors to retain a significant portion of their assets without...more

Dechert LLP

Global Private Equity Newsletter - Winter 2016 Edition: Recent Developments in Acquisition Finance

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Two recent court decisions may result in a broadening of the range of options available to an equity sponsor in respect of an insolvent portfolio company. The first decision may provide increased flexibility in structuring...more

Troutman Pepper

Cramdown Hurdles Round 3: Try, Try Again

Troutman Pepper on

In re Ramz Real Estate Co., LLC, 510 B.R. 712 (Bankr. S.D.N.Y. 2013) – An undersecured mortgagee objected to a debtor’s proposed plan of reorganization on several grounds, including that (1) the plan was not approved by...more

Winthrop & Weinstine, P.A.

Seventh Circuit Holds That Debtor Cannot Circumvent Bankruptcy's Absolute-Priority Rule

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

Sheppard Mullin Richter & Hampton LLP

The Seventh Circuit Expands Scope of Absolute Priority Rule to Protect Creditors

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

BakerHostetler

Seventh Circuit Reaffirms Absolute-Priority Rule in In re Castleton Plaza, LP

BakerHostetler on

Can an equity investor who directs an insider to contribute "new value" to a debtor under a plan of reorganization, so as to retain his interest in the company, avoid an express market test for that new equity? The answer to...more

Bilzin Sumberg

Castleton Ruling Fortifies 7th Circ. Pro-Creditor Trend

Bilzin Sumberg on

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

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