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Creditors’ Committee

Absolute Priority Rule in Bankruptcy – Are You Atop the List?

Editor’s Note: This is an updated version of an article published in May of 2013. 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 […]


Unsecured Creditors Prevail Against the UCC-1

In the realm of lending, the perfected Uniform Commercial Code-1 (“UCC-1”) is the hallmark of security.  If a secured asset has value, and the liens are valid, what other issues are there to consider?  Well, in at least one instance, underlying intercompany notes were the issue.  And because of the nature of these notes, the […]


A Primer on the Chief Restructuring Officer (CRO)

A Brief History of the Chief Restructuring Officer The role of a Chief Restructuring Officer (“CRO”) is approximately four decades old.  While still a somewhat new role in the 1990s, CROs are now ubiquitous in the restructuring community.  Todd Zywicki, a George Mason law professor who specializes in bankruptcy law, traces the origin of the […]


Dealing with Distress For Fun & Profit – Installment #14 – An Introduction to Chapter 11 for Unsecured Creditors: What Every Unsecured Creditor Should Know

A written tour of business bankruptcy and its alternatives. If you would like to read from the beginning, this series started here with a broad overview of business bankruptcy. Most recently, the series has focused on the automatic stay, where you can find the 30,000-foot view. Or you can find more specific treatment here, here and […]


Creditors’ Committees in Chapter 11 May Be Under Attack

The Delaware Bankruptcy Court has ruled that professional fees are not limited to the amount of the “carve-out” approved as part of a post-petition financing order. In In re Molycorp, Judge Sontchi ruled that counsel fees, which are otherwise approved by the court, must be paid to confirm a plan of reorganization—even if the approved […]


Dealing With Distress For Fun & Profit – Installment #2 – Bankruptcy Parties

A written tour of business bankruptcy and its alternatives A typical commercial litigation case involves a judge, a plaintiff, and a defendant. A typical commercial bankruptcy case also has a judge, but that’s about where the similarities stop. A typical commercial litigation case, you see, is a two-party dispute. A typical commercial bankruptcy case is anything […]


Showdown in Spokane: The Spokane Country Club Bankruptcy Case

The bankruptcy case of the Spokane Country Club (“SCC” the “Club” or the “Debtor”) is a very interesting study of how the bankruptcy process has not only been used to disrupt the collection efforts of plaintiff creditors who have already been awarded a judgment, but also to essentially negate significant policy changes for a club that had been stipulated […]


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 […]


RECOMMENDED READING: What Can a Creditors Committee Do? Prevent the DIP Lender From Making Off With Assets That Could Help Pay Unsecured Creditors

The recommended reading this time is not an article but a pleading in a bankruptcy case. The official committee of unsecured creditors (the “Committee”) appointed in the Kids Brands case (In re Kid Brands, Inc., Case No. 14-22582 (Bankr. D. N.J.) objected to financing for which the large corporate debtor seeks approval from the Court. […]


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