Chapter 11 plans that propose to extinguish existing equity interests because the estate does not have any value remaining after the payment of creditor claims are common. The Bankruptcy Code's "absolute priority rule"...more
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
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
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
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
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
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
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