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Claims

What are the legal remedies available under Article 9 of the UCC to a lender whose loan is secured by the personal property of a borrower who is in default? How can these legal remedies can be implemented in practice?

A Series on the ABCs of ABCs, when it comes to claims there’s a plethora of them. From secured, to unsecured, to bankruptcy, and trade. Read all the basics in this installment of Dealing with Corporate Distress. This Installment expands on the complexity of claims and claim priority in bankruptcy.

Are you filing a proof of claim in a chapter 11 bankruptcy case? There are many risks and issues to be cautious of as a creditor filing a proof of claim.

A Series on the ABCs of ABCs, when it comes to claims there’s a plethora of them. From secured, to unsecured, to bankruptcy, and trade. Read all the basics in this installment of Dealing with Corporate Distress.

Lender Liability Law Protects Distressed Borrowers from Unfair Practices The relationship between a lender and borrower can be complex. The borrower wants capital to run and grow its business, and the lenders want to earn a return and eventually get their principal back. If the borrower complies with the terms of the loan, all is good. If the borrower breaches, then the lender has a number of rights and remedies. Sometimes, however, a lender overreaches. One example of an overreach is when a lender exerts control over the daily activities […]

The Battle Over Post-Petition Interest for Oversecured Creditors In bankruptcy, an oversecured creditor (in which the value of its collateral is higher than its claim) is first in line to be paid. Unfortunately, oversecured creditors are also entitled to post-petition interest (interest that accrues or would accrue after the start of bankruptcy proceedings, regardless of whether or not it is allowed in the proceeding). As a debtor who successfully increases the value of the asset/collateral—how do you alleviate an increased claim and maintain liquidity? And what say does the secured […]

Two Decisions that Clarify “Receipt” of Goods in Administrative Expense Claims   Section 503(b)(9) of the Bankruptcy Code1 allows a creditor an administrative expense claim (i.e., a claim with payment priority over other pre-bankruptcy claims) for the value of goods that the debtor “received” within 20 days before filing for bankruptcy. But what precisely does “received” mean in this context?  Suppose the parties agree that shipments will be free on board (“FOB”) at the origin, or the shipping point. Then, the buyer files for bankruptcy. Does the seller have an […]

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 confirmation of a plan by other parties. For a plan to be approved consensually, each class of claims or interests must approve it. Approval by a class of claims requires a “yes” vote by a […]

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 goods delivered beginning not only 20 days prior to the filing, but also continuing after the filing. Bankruptcy code Section 503(b)(9) applies to goods delivered prior to the petition, and Section 503(b)(1)(A) applies afterwards. Because […]

This series was started (click here to read from the beginning) with a broad overview of business bankruptcy but our last few installments have focused on unsecured creditors (click here to read about unsecured creditors) and the priority scheme in bankruptcy (click here for the 30,000-foot view or you can find more specific treatment here, here and here). In this installment, we move on to the nuts and bolts of filing, preserving and protecting your claim in bankruptcy. A. File Proof of Claims and Adhere to Bar Dates to Protect Your Claim Of all bankruptcy […]

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