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Chapter 11 Interest Rates

Proskauer Rose LLP

Third Circuit Follows Fifth and Ninth Circuits on Treatment of Make-Whole Claims in Bankruptcy

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In a much-anticipated decision, the United States Court of Appeals for the Third Circuit recently held that unsecured noteholders’ claims against a debtor for certain “Applicable Premiums” were the “economic equivalent” to...more

Seward & Kissel LLP

Hertz So Good, Drawing Lots, and Sack Lunch

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Hertz Noteholders Land Win in Bankruptcy Interest Payoff Fight | Bloomberg Law - On Tuesday, an appeals court ruled that car rental company the Hertz Corp, which emerged from bankruptcy in 2021, must pay over $270 million...more

Seward & Kissel LLP

Solar Flare, Security Breach, and Therapeutic Treatment

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Residential Solar Firm Lumio Files Bankruptcy, Plans to Sell | Bloomberg - Privately owned provider of residential solar panels Lumio filed for Chapter 11 bankruptcy on Tuesday in Delaware with plans to sell its company to...more

Seward & Kissel LLP

The Italian Job, Distribution Channel, Power Struggle, and FDIC You in Court

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Restaurant chain Buca di Beppo files for bankruptcy | Reuters The Italian restaurant chain filed for Chapter 11 bankruptcy, citing assets between $0 to $50,000 and debts of $15 million to $50 million to at least 30 creditors....more

Hahn Loeser & Parks LLP

Ohio: An Introduction to Bankruptcy/Restructuring (Chambers)

In 2023, despite aggressive predictions of a near-term recession, the economy remained relatively steady. This resulted in an uneven year for restructuring. Substantial money has been raised in the private credit markets and...more

Bowditch & Dewey

Ten Reasons to Expect an Increase in Financial Restructurings in 2025

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1. Commercial Chapter 11 Bankruptcy Filings Have Increased Significantly Year-Over-Year: There has been a significant increase in the number of commercial Chapter 11 cases (larger company filings) in 2024. By way of example,...more

Proskauer Rose LLP

Staying Afloat in an Uncertain Economic World: Hope for the Best, Prepare for the Worst Private Credit Restructuring Year in...

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While global inflation and higher-for-longer interest rates dominated macroeconomic headlines over the last year, middle-market private credit restructurings witnessed three notable trends.  First, these credits remained...more

Ward and Smith, P.A.

What the "Biggest Holiday Inn in the World" Can Teach Us About Default Interest in Bankruptcy

Ward and Smith, P.A. on

When a borrower triggers a monetary default under a loan by failing to make required payments, most loan documents allow the lender to accelerate the loan and invoke a default interest rate and penalties....more

Seward & Kissel LLP

California Schemin’, Working Draft, Catch 22, and Coffee Talk

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Bishop: Diocese of Sacramento to seek bankruptcy protection after over 250 lawsuits claim sexual abuse| CBS News Sacramento - After receiving more than 250 lawsuits alleging sexual abuse by clergy and other staff, the...more

Jones Day

Cure and Reinstatement of Defaulted Loan Under Chapter 11 Plan Requires Payment of Default-Rate Interest

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Section 1124(2) of the Bankruptcy Code gives chapter 11 debtors a valuable tool for use in situations where long-term prepetition debt carries a significantly lower interest rate than the rates available at the time of...more

Tonkon Torp LLP

The Eighth Circuit’s Topp Decision Adds Flexibility to Cramdown Interest Rate Calculations

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The Eighth Circuit recently weighed in on the issue of how to determine appropriate cramdown interest rates for secured creditors in Chapter 11 bankruptcy plans under Section 1129 of the Bankruptcy Code....more

Pillsbury Winthrop Shaw Pittman LLP

Not So Fast: Satisfaction of Default-Rate Interest Required before Loan Reinstatement

A New York Bankruptcy Judge held that a debtor must pay default-rate interest and fees to a secured lender as a condition to reinstatement of defaulted and accelerated debt under a chapter 11 plan. A debtor must pay...more

Rivkin Radler LLP

Debtor Corp’s S Election: “Property” in Bankruptcy?

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Uncertain Future- The Congressional Budget Office (“CBO”) recently released some data for the federal government’s 2023 fiscal year. According to the CBO, the federal budget deficit for the year was $1.7 trillion, or...more

Goodwin

Till We Meet Again: Eighth Circuit Weighs in on Appropriate Interest Rate in a Cramdown

Goodwin on

Much has been written about how to calculate the appropriate interest rate for the deferred cash payments a debtor may propose to pay to a rejecting secured creditor under a “cramdown” Chapter 11 plan to meet the “fair and...more

Seward & Kissel LLP

Deep Cuts, Bankruptcy Aid, Aearo-Plan, and Unfair Deal?

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Mallinckrodt's opioid creditors support fast-track second bankruptcy | Reuters - Drugmaker Mallinckrodt, who previously emerged from its initial Chapter 11 in June 2022, filed for its second bankruptcy this week. The...more

ArentFox Schiff

Bankruptcy Court Rules Payment of Default Interest is Required to Reinstate Defaulted Loan

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With rising interest rates, one strategy a debtor can pursue as part of a reorganization is to reinstate a defaulted loan that has a below market rate. As the bankruptcy court for the Southern District of New York recently...more

Pillsbury Winthrop Shaw Pittman LLP

Bankruptcy and Restructuring Considerations for De-SPACed Companies

Distressed de-SPACed companies are increasingly turning to chapter 11 as a means of restructuring their debts and preserving going-concern value. Many de-SPAC mergers in 2020 and 2021 involved pre-revenue or...more

Foley & Lardner LLP

Near-Term Disruptions and Opportunities in the Automotive Supply Industry

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Disruption in the automotive industry seems a near-constant force these days. The automotive supply chain continues to suffer hangover challenges from the pandemic (including raw materials shortages and increased labor...more

Proskauer Rose LLP

Liability Management – Vaccine or Pandemic? Private Credit Restructuring Year in Review

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Once again, we reflect on the prior year for restructuring trends impacting private credit lenders. Last year it was all about “liability management”—the latest trend in which the limits of sponsor-favorable loan documents...more

Tonkon Torp LLP

When Interest Rates Rise, Consider Bankruptcy Restructuring for Rate Relief

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With the Federal Reserve raising interest rates, businesses struggling with floating rate increases and those needing to refinance may find bankruptcy reorganization an appealing alternative to high interest refinancing....more

Morrison & Foerster LLP

Recent Ninth Circuit Decision Regarding Interest on Claims for Unimpaired Credit

On August 29, 2022, in the PG&E bankruptcy matter, the Court of Appeals for the Ninth Circuit became the first circuit-level court to address the question of what is the correct rate of interest to be applied to unimpaired...more

Mintz - Bankruptcy & Restructuring Viewpoints

Charting New (and Familiar) Territory: The Voyager Crypto Bankruptcy

Voyager Digital Assets Inc., along with two of its affiliates, filed bankruptcy petitions in the Southern District of New York on July 5, 2022. The filing is significant—it followed months of an extreme downturn in the...more

ArentFox Schiff

Will the Retail Apocalypse Return?

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After years of large retailers and malls struggling prior to the COVID-19 pandemic and the most vulnerable retailers filing for bankruptcy relief in its immediate wake in early 2020, the US economy rebounded strongly with the...more

Jones Day

Oversecured Creditor's Right to Contractual Default-Rate Interest Allowed Under State Law

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It is generally well understood that an "oversecured" creditor is entitled to interest and, to the extent provided for under a loan agreement, related fees and charges as part of its secured claim in a bankruptcy case....more

Ballard Spahr LLP

CFPB announces proposed consent order with companies alleged to have collected loans void under state law

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The CFPB announced that it has entered into a proposed consent order with Think Finance and six subsidiaries (collectively, the “Think Entities’) to settle the Bureau’s lawsuit filed in November 2017 that alleged the Think...more

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