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Chapter 11 Plans

Dealing With Distress For Fun & Profit – Installment #3 – The Bankruptcy Code

A written tour of business bankruptcy and its alternatives In order to understand the options a financially distressed business (or its owners, creditors, or potential buyers) has, one has to understand the Bankruptcy Code. The Bankruptcy Code is contained in Title 11 of the U.S. Code and is divided into chapters. Chapters 1, 3 and […]


Dealing With Distress For Fun & Profit – Installment #1 – Bankruptcy Basics

A written tour of business bankruptcy and its alternatives You manage a private equity or hedge fund. Or maybe you work for a family office. Or maybe you’re the CEO or CFO of a business that has a competitor that is failing and you are considering trying to buy it on the cheap. Or perhaps […]


The “A&P” Chapter 22 Bankruptcy Saga—Anomaly or Canary in a Coal Mine?

A few months ago, on July 20, 2015, the Great Atlantic & Pacific Tea Company, more commonly known as “A&P,” made history by filing what we in the restructuring industry like to call “Chapter 22”—that is, a Chapter 11 restructuring bankruptcy part deux. A chapter 22 in and of itself is not that unique, but […]


“Don’t Pass Me By”—The Jevic Case and Bypassing the Absolute Priority Rule

It’s an all-too-familiar situation: a debtor files for chapter 11 bankruptcy and an asset sale takes place, but there is not enough money at the end of the day to fund a plan confirmation process, or adequately pay off all creditors who come first in line according to the bankruptcy code. That “line” is defined […]


What Else Can a Creditors Committee Do? Maybe Reap $1.5 Billion for Unsecured Creditors (Lender Beware)

JPMorgan Chase & Co. and others (“JPM”) lent $1.5 billion to General Motors Corporation (“Old GM”) under a term loan agreement (the “Term Loan Agreement”).  JPM was the senior secured creditor of Old GM.  Old Gm went into chapter 11 bankruptcy.  Under the terms of the DIP financing approved by the bankruptcy court, proceeds of […]


KUNEY’S CORNER – The Many Fates of Intercreditor Agreements: Ignored in a Cramdown, Or Enforced Because Well-Drafted and Not Contrary to Bankruptcy Policy, or What?

Secured creditors often seek agreement among themselves in order to limit intercreditor conflict and expedite realization of their respective claims against a borrower in a chapter 11 case.  One might call it a “strength through peace” approach.  However, in chapter 11 cases, some courts have ignored intercreditor agreements in cramdown situations, refused to enforce certain […]


KUNEY’S CORNER – Cramming Down a Chapter 11 Plan by Giving Secured Creditor 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?[i] Yes, if the value of the new lien meets the test of “indubitable equivalence” with […]


KUNEY’S CORNER – To Cheat Perdition Under the Debtor’s Plan: The Secured Creditor’s Section 1111(b) Election

A recent article by this author on this site presented the debtor’s cram down powers, to be employed in confirming a plan over the opposition of impaired creditors.[i] That article referred briefly to an undersecured secured creditor’s counter-measure: the section 1111(b)(2) election. By making this election, a secured creditor chooses to do without (i.e. “plucks […]


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