Debtors › Equity Investors

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

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

Rogers Towers: Insiders as Equity Investors: Competition Protects Lenders from Absolute Priority Rule Circumvention

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