A Cautionary Tale for Claims Traders and Other Contract Counterparties

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“Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.” Carl Philipp Gottfried von Clausewitz

A Prussian general and the author of On War may still have a thing or two to teach claims traders and other contract counterparties seeking to avoid their deals being blown up. If you’re in the claims trading business, you’re welcome to skip the history lesson and instead read Judge Michael Wiles’ bench decision in Westinghouse.1 Continue reading >>

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Section 363(k) of the Bankruptcy Code grants secured creditors the right to credit bid up to the full amount of their claim as a form of currency to bid to purchase assets securing their claim from a debtor in connection with a stand-alone sale of assets under section 363(b). In […]

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Recently in Novinda,1 the Tenth Circuit Bankruptcy Appellate Panel2 upheld the separate classification of creditor claims in a chapter 11 plan on the basis that, among other things, such claims possessed certain attributes (described as “non-creditor interests”) that distinguished them from other similarly situated claims, overruling objections from Appellant creditors […]

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A fundamental tenet of chapter 11 bankruptcies is the absolute priority rule. Initially a judge-created doctrine, the absolute priority rule was partially codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code. Under section 1129, plans must be “fair and equitable” in order to be confirmed. Section 1129(b)(2)(B)(ii)1 provides guidance as to […]