Is it possible for a debtor company to issue debt (such as bonds) and contractually agree for that debt to rank lower in priority than debts owed by a company to other unsecured creditors? This article examines the commercial...more
Lenders on commercial real estate projects typically require that the general contractor subordinate its mechanics’ lien rights to the lender’s deed of trust and other financing documents in order to assure the lender that...more
For those of us that practice in the world of commercial real estate financing transactions, the fact pattern is a tale as old as time: the Bank is making a term loan secured by real estate largely based on leases on the...more
On October 29, 2021, Judge Laura Taylor Swain, the presiding judge in the Puerto Rico bankruptcy case, ruled that approximately $2 billion in intragovernmental loan claims were subordinated to bonds issued by the Puerto Rico...more
Chapter 15 Update: U.S. Bankruptcy Court Refuses To Enforce Order Approving Indonesian Debt Restructuring Plan Due To Third-party Releases - Cross-border bankruptcy cases filed in the U.S. under chapter 15 of the...more
In In re Fencepost Productions Inc., 2021 WL 1259691 (Bankr. D. Kan. Mar. 31, 2021), the U.S. Bankruptcy Court for the District of Kansas recently addressed the enforceability of a provision in a pre-bankruptcy subordination...more
Subordination agreements are generally enforced in accordance with applicable non-bankruptcy law in bankruptcy cases. The decision in In re Fencepost Productions, Inc., No. 19-41542, 2021 WL 1259691 (Bankr. D. Kan. Mar. 31,...more
Many legal contracts operate like coordinate harmony. The parties have different roles, but each is equally important to the transaction. Differences in bargaining power may allow one party to have the upper hand, but both...more
The Bankruptcy Code provides that subordination agreements are enforceable in bankruptcy to the same extent that such agreements are enforceable under non-bankruptcy law. 11 U.S.C. § 510(a). However, Section 1129(b)(1) of...more
In the latest decision arising out of long-running disputes over confirmation of the Tribune Company’s Chapter 11 plan, the Third Circuit issued important new guidance concerning the enforceability of subordination agreements...more
Eight years after the Delaware bankruptcy court confirmed the chapter 11 plan of Tribune Company and its affiliates, the United States Court of Appeals for the Third Circuit (the Court) affirmed the bankruptcy court’s...more
The U.S. Court of Appeals for the Third Circuit recently confirmed that bankruptcy plans need not always recognize subordination agreements among creditors. The Tribune Company was the largest media conglomerate in the...more
“Unfair discrimination is rough justice. It exemplifies the Code’s tendency to replace stringent requirements with more flexible tests that increase the likelihood that a plan can be negotiated and confirmed,” announced Judge...more
Recently, in In re Tribune Company, the Third Circuit affirmed that the Bankruptcy Code means exactly what it says and that the enforcement of subordination agreements can be abridged when cramming down confirmation of a...more
Most Leases contain what are called automatic subordination clauses, pursuant to which the Tenant agrees that the Lease is subordinate to any Mortgages granted by the Landlord, whether they are already in existence when the...more
The Tennessee Construction Industry Payment Protection Act was signed into law on June 22. The Act addresses or reallocates certain risks associated with non-payment on construction projects under Tennessee’s Prompt Pay Act...more
Everyone is familiar with the “Rock, Paper, Scissors” method of resolving disputes where scissors cut paper, paper covers rock, and rock breaks scissors. In Futuri Real Estate, Inc. v. Atlantic Trustee Services, the Virginia...more
In Futuri Real Estate, Inc. v. Atlantic Trustee Servs., LLC, borrowers Milton and Armida Cortez (the “Borrowers”) obtained three loans secured by separate deeds of trust on their residence: (A) a $415,000 deed of trust in...more
In In re Energy Future Holdings Corp., 2019 WL 2535700 (3d Cir. June 19, 2019), a panel of the U.S. Court of Appeals for the Third Circuit ruled that adequate protection payments made during a bankruptcy case and...more
Earlier this year, the United States Bankruptcy Court for the Southern District of New York issued an opinion in BOKF NA v. Wilmington Sav. Fund Soc’y FSB (In re MPM Silicones LLC), Case No. 15-2280, 2019 WL 121003 (S.D.N.Y....more
Below is an overview of the key terms and provisions in intercreditor/subordination agreements governing the relationship between a senior secured lender (the “Senior Lender”) and a mezzanine lender (the “Mezz Lender”)....more
Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a...more
In In re Argon Credit, LLC, 2019 WL 169315 (Bankr. N.D. Ill. Jan. 10, 2019), the U.S. Bankruptcy Court for the Northern District of Illinois ruled that, in accordance with section 510(a) of the Bankruptcy Code, a standby...more
On November 30, 2018, Judge Nelson S. Román of the United States District Court for the Southern District of New York issued a decision affirming the dismissal of certain claims brought by senior secured creditors against...more
After the Third Circuit found that the appeal of confirmation of the Tribune Plan by two senior notes trustees was not equitably moot, Judge Sleet of the Delaware District Court held that the Tribune Plan’s failure to...more