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Business Bankruptcy

Order of Priority

Which Creditors Get Paid First? The Liquidation Order of (Absolute) Priority

What is the Hierarchy of Claims Under the Absolute Priority Rule? If you are a vendor, service provider, or another unsecured creditor to a chapter 11 debtor, you cannot be blamed for feeling like a duped lover after learning about the bankruptcy of your once devoted business companion. Despite the promises of “I’ll stand by […]


Non-Bankruptcy Alternative Paths

Dealing with Corporate Distress 07: Chapter 11 is Not Always the Answer: Strategic Alternatives For and Against Distressed Businesses

The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency In Installment 5, we walked through the lifecycle of a hypothetical traditional chapter 11, and in Installment 6 we discussed key concepts you must comprehend in order to understand any chapter 11 case. Now we pull the camera back and turn our focus away from chapter […]


Healthcare Provider Bankruptcy

3 Special Issues in Healthcare Restructurings

2020 Saw Increased Healthcare Provider Bankruptcies. What Should Companies & Restructuring Professionals Know Moving Forward? Healthcare providers face many pressures, including costs associated with regulatory compliance and necessary technological and infrastructure investments. Congress’ repeated attempts to reform healthcare legislation have long created uncertainties for the healthcare industry. A PwC report predicts that throughout 2021, healthcare […]


Exchange Offer

90 Second Lesson: What is an Exchange Offer?

Why a Distressed Company May Make an Exchange Offer During Financial Restructuring Question Fred T. asks: “I own securities of a company and heard on the news that [the company] is contemplating doing an ‘exchange offer’. What is an exchange offer?” In this quick lesson, we will discuss distressed exchange offers. Answer An exchange offer […]


Bankruptcy venue

What is Venue, and When Is Venue Transfer Permissible in Bankruptcy Litigation?

A Panel Discussion on the Choice and Challenges of Bankruptcy Venue and Venue Transfers In bankruptcy litigation, the venue can have a major influence on an outcome. We selected expert panel members—each a partner or managing director in the restructuring industry—to discuss why venue fights occur and how business owners (and their advisors) should approach […]


Supplier to Bankrupt Retailer

Steps a Supplier Can Take in the Face of a Potentially Bankrupt Retailer

Adequate Assurance, Suspended Delivery, and Other Rights and Remedies of a Supplier to a Bankrupt Retailer The impending bankruptcy of a retailer is one of the most stressful experiences that a supplier may face. The supplier is confronted not only with the potential loss of a major customer, but also with the possibility of significant […]


Building a Board of Directors

Recruiting Post-Bankruptcy Board Directors in the Pandemic Aftermath

How to Develop Board Committees Equipped for a New Landscape As Covid induced bankruptcies proliferate, creditors who become stockholders will need to focus not only on the future financial health of the reorganized company, but also on its overall governance. The new post-pandemic landscape will be revolutionary, not evolutionary. It will demand new owners and […]


Questionable Right to Credit Bid

90 Second Lesson: The (Arguable) Right to Credit Bid in Plan Sales

Understanding the Right to Credit Bid After Radlax [Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] Question A private equity investor wrote in recently asking us to address credit bidding in the […]


Calculating Legal Rate

What Constitutes the “Legal Rate” in a Solvent Debtor Bankruptcy Case?

Defining the Legal Rate in a Solvent Debtor Bankruptcy Using Contract Rate and States’ Statutory Rates of Interest Chapter 11 bankruptcies generally find the debtor to be insolvent, but not always. Occasionally, a debtor will emerge from the bankruptcy process as a solvent entity, and in those situations, Bankruptcy Code §726(a)(5) may entitle creditors of […]


Bankruptcy Litigation Funding

Third-Party Litigation Funding (TPLF) and Issues It Creates In Bankruptcy

Investing in Litigation – The Bankruptcy Code and Third-Party Funding Third-party litigation funding (“TPLF”) is, beyond a doubt, here to stay. In bankruptcy cases, TPLF arises in a number of contexts. First is the TPLF as a pre-petition secured or unsecured creditor—i.e., the TPLF source funded litigation and thereby acquired property rights in litigation proceeds […]


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