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Chapter 11 Plans
Kuney’s Corner – Giving Secured Creditor Substitute Collateral in a Chapter 11 Cramdown
Pacifying a Hostile Lender with a Motion to Substitute Collateral Can a Chapter 11 debtor confirm a plan that gives a hostile secured creditor a lien on an orange as a substitute, in essence, for the secured creditor’s lien on an apple that the debtor wants to keep and use?1 Yes, a motion to […]
PPP Loans for Chapter 11 Debtors? Maybe…But You Have Other Options
The SBA’s Views, Court Rulings and Options for Your Company You need to restructure your debt and/or deal as soon as possible with assertive creditors. You want to preserve your company, and you would benefit (or already have benefited) from Paycheck Protection Program (PPP) funds as a bridge. What do you do? Can you risk […]
Corporate Attorney-Client Privilege is in the Hands of the Bankruptcy Trustee
When is Your Company’s Attorney-Client Communication No Longer a Secret? Imagine if every secret and strategy that you had ever shared with your attorney were laid open for the world to see. A trustee in a business bankruptcy case may well have the power to review, publish, and wield all of the debtor’s attorney-client […]
Meridian Sunrise Village: Risks of Loan-to-Own Strategy
Considerations for Distressed Private Equity You are a PE fund manager. Your fund employs a loan-to-own strategy (also referred to as distressed private equity) to effect take-overs of target companies. You are accustomed to exerting powerful leverage in chapter 11 cases, particularly when you buy enough claims to confirm a plan or to block […]
Bankruptcy Gifts: When a Court Will Look a Gift Horse in the Mouth
Is the Jury In or Out on Chapter 11 Bankruptcy Gifts? The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor’s proposed exit—either through a chapter 11 plan or a Section 363 sale. Bankruptcy “gifts” typically involve a structurally senior class voluntarily giving some of […]
The Good, the Bad, and the Ugly of Replacing a Debtor’s Management with a Chapter 11 Trustee
Which is Better: Debtor in Possession or Chapter 11 Trustee? The mere act of filing a chapter 11 bankruptcy petition significantly alters the relationship between a debtor and its creditors, yet, perhaps surprisingly, the filing does not automatically trigger removal of the very management team that led (or maybe drove) the debtor into bankruptcy in […]
Sears Chapter 11 Rulings Threaten to Upend Administrative Claim Status for Goods Vendors
Application of Section 503(b)(1)(A) and 503(b)(9) in the Sears Chapter 11 Filing Precedent setting rulings in the Sears chapter 11 case could radically alter how vendors support companies who file for bankruptcy in the future. Historically the presumption and practice in the vast majority of bankruptcy cases has been that vendors receive priority status for […]
Dealing with Corporate Distress 03: Welcome to the Jungle: The Animals of the Corporate Restructuring Industry
The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency Who are you? Maybe your company needs to file chapter 11. Or one of your customers recently filed. Or maybe a competitor is in (or is rumored to be close to filing) chapter 11. Maybe you’re thinking about getting into the corporate restructuring industry yourself. Regardless […]
Dealing with Corporate Distress 02: These Are the People in Our Neighborhood: An Overview of Parties in Chapter 11
A Series on the ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency Since a judge presides over a chapter 11 proceeding, one might assume that a chapter 11 case is like any other commercial litigation matter, with one party on each side of the case: a plaintiff and a defendant. One would be wrong (Felix […]
Dealing with Corporate Distress 01: Hello Darkness, Our Dear Friend
A Series on the ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency Greetings, dear reader: It seems you’re interested in learning how to deal with corporate distress, and we’re glad you’re here. But let’s first make sure you got on the right plane. Maybe you . . . Are a C-suite executive of a business […]