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Equitable Subordination

90 Second Lesson: What is the Difference Between Recharacterization and Equitable Subordination?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: Jeff P. from Los Angeles emailed asking us to explain the interplay between recharacterization and equitable subordination? ANSWER: While recharacterization and equitable subordination […]


Dealing With Distress For Fun & Profit – Installment #9 – Secured Creditors & Chapter 11

A written tour of business bankruptcy and its alternatives Our prior installment discussed some of the basic things a secured creditor needs to know about Chapter 11. The automatic stay was one of them.  But, since we like to keep these things short (on the presumption that others also have short attention spans) we didn’t […]


How Unsecured Creditors Push Ahead of Lenders Who in Fact Invested, Part III – Equitable Subordination vs. Recharacterization

In part one of our series on recharacterization, we discussed the elements of judicial recharacterization of loans as equity interests.[i]  In part two of the series, we considered how debtors can “claw back” putative “loans” that they may have repaid years earlier because the “loans” were in fact equity investments and their repayment was invalid.[ii]  […]


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