Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
It has become conventional wisdom that bankruptcy — even Chapter 11 — is now largely a process controlled by secured lenders. See, eg, Skeel DA Jr.: Creditors' Ball: The “New” New Corporate Governance in Chapter 11. 152 U. Pa. L. Rev. 917 (2003). Whatever the merits of this view, the undersecured lender is still in an unenviable position as a result of the Supreme Court's holding in Timbers that undersecured creditors who are stayed from foreclosing on their collateral during bankruptcy are not entitled to accrue or collect interest on their claims during the bankruptcy case or otherwise be compensated for their loss. United Sav. Assn. of Texas v. Timbers of Inwood Forest Assocs. (In re Timbers of Inwood Forest Assocs.), 484 U.S. 365, 626 (1988). In addition, Bankruptcy Code ' 502(b)(2) bars claims for “unmatured” (postpetition) interest.
We have found two successful strategies by which lenders can avoid both these limitations. Borrowers are unlikely to resist the use of these strategies because neither has any significant pre-bankruptcy effect on the borrower — or the lender. The form of the loan will be different, but the substance of the loan will be the same. The strategies are 1) to segment the loan, and 2) to cast the loan in the form of an interest rate swap. The use of either strategy will enable the lender to accrue and collect interest on all or a substantial part of its loan during the period the debtor is in bankruptcy.
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.