News & Analysis as of

Chapter 11 Absolute Priority Rule

Virginia Financial Institutions - June 2013

by Reed Smith on

In this issue: - CFPB Amends Ability-to-Repay Rule to Ease Standards for Small Creditors - Assistant Managers Fail to Break the Piggy Bank...For Now - Federal Agencies Make Changes to Regulation...more

Recent Court Decisions Hold That The Absolute Priority Rule Still Protects Creditors Of Individual Chapter 11 Debtors

by Dickinson Wright on

As the economic recovery continues to wind along through the up and down financial cycles that have been the hallmark of the last four years, there can be little doubt that some individuals historically on the higher end of...more

When Lenders are the Losers in Bankruptcy Court...Well, Not so Fast

by Dechert LLP on

Last October, I wrote about a scheme employed, in three separate bankruptcy cases, by debtors seeking to evade the absolute priority rule in order to keep the real property owned by the debtor in the hands of the ‘family’ at...more

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

by 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

"New Value" Plans Require Competitive Bidding, Says 7th Circuit

by Davis Wright Tremaine LLP on

In a decision issued yesterday, the 7th Circuit Court of Appeals held that insiders can't be given a special opportunity to invest in a bankrupt debtor under the guise of contributing "new value" unless the debtor makes the...more

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