When a borrower defaults on its loan agreements, a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a loan forbearance agreement. If the borrower can convince the lender that, within a reasonably short […]
Considering making a secured loan? The DailyDac Editors give key insight to becoming a secured creditor, and what to identify about distressed borrowers.
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.
Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Tom S. wrote in asking, I am a hard money lender and have loaned on all sorts of collateral, but I’ve never loaned on raw […]
What is the Hierarchy of Claims Under the Absolute Priority Rule? 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 of “I’ll stand by […]
Understanding the Right to Credit Bid After Radlax [Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] Question A private equity investor wrote in recently asking us to address credit bidding in the […]
Creative Destruction and an Inevitable Fall: What Can We Learn From the Penthouse Magazine Bankruptcy? Penthouse International, publisher of Penthouse Magazine, sold for $11.2 million in June of 2018. The company was worth about $700 million (adjusted for inflation) at its height. The latest Penthouse Magazine bankruptcy highlights just how far Penthouse has fallen, and […]
What Happens When Your Consignee Becomes Distressed and What You Can Do I was speaking with a client yesterday about consignment arrangements. What we discussed should be of interest to any company that sells goods using a consignment arrangement, and I thought I would share. What is a Consignment Arrangement? In a consignment arrangement, the […]
How Does a Fee Carve-Out Relate to A Carve-Out for Unsecured Creditors? [Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] In a separate 90 Second Lesson, we defined and explained the […]
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 […]