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Chapter 11 Plans

ABI Commission Report on Chapter 11 Reforms—More Hope in Sight for the Little Guy?

Among a number of issues addressed by an American Bankruptcy Institute Commission tasked with making recommendations to the federal legislature regarding bankruptcy law was a subject that has been on the minds of many bankruptcy professionals over the last few years. It is also certainly a subject that has been on the minds of countless […]


Aereo, Inc.: A Chapter 11 Debtor That is Not Broke

The word bankruptcy is derived from Italian banca rotta, meaning “broken bench,” and may derive from the early modern Florentine custom of breaking a moneychanger’s bench to signify his insolvency and cease his operations.  Yet, as we explained earlier this year, a chapter 11 debtor need not be broke.  We summarized the law as follows: […]


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 […]


Demystifying Administrative Expenses in Bankruptcy

Bankruptcy professionals, other business professionals, and trade vendors would be reluctant to provide services or otherwise extend credit on an unsecured basis to an insolvent entity like a bankruptcy debtor unless their claims to payment were somehow ensured.  In addressing this predicament, Congress provided that holders of unsecured claims that arise from certain transactions that […]


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 – Cramdown: An Impaired Class of Claims Says “No” But the Plan is Confirmed Anyway

By filing a chapter 11 petition, the debtor seizes the initiative in proposing a reorganization plan – which is to provide how soon, in what amount, and in what manner creditors’ claims are paid. [i] But a debtor does not necessarily get its way. A class of creditors who are not getting paid in full […]


Selling Distressed Assets: The Assignment for the Benefit of Creditors (ABC) Alternative

Editor’s Note: This article provides a broad overview of the use of state law assignments for the benefit of creditors (ABCs) as an efficient alternative to chapter 11 and chapter 7 liquidations conducted under federal law. For a great discussion on other options available to struggling businesses, we recommend this webinar. Financially distressed businesses faced with unlikely […]


Opening the Kimono: Operational and Financial Reporting Obligations at the Outset of a Chapter 11 Case

While providing numerous advantages to the companies that choose to invoke it, chapter 11 also imposes significant and sometimes burdensome public reporting obligations on them – hence the metaphor of the opened kimono. Because of the debtor’s reporting obligations, creditors and other parties with an interest in the chapter 11 case (such as potential purchasers […]


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