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ABI Bankruptcy Reform

The ABI Commission recently recommended decimating the concept of adequate protection for cash flow lenders and protecting their interest only to the extent of foreclosure value. According to the authors, this recommendation has no regard for the fact that cash flow loans are predicated on a sale of the business as a going concern or the practical difficulty in attempting to choose a value based on a hypothetical sale.

23 minute read April 02, 2015 at 12:00 AM
By
Randall Klein and Prisca Kim
ABI Bankruptcy Reform

When Congress enacted the 1978 Bankruptcy Code, two competing groups of lawyers and academics squared off: those who favored restructuring opportunities for debtors by restricting the scope of secured lender rights and remedies; and those who favored the expansion and protection of commercial lending laws. ( See Kronman, The Treatment of Security Interests in After-Acquired Property Under the Proposed Bankruptcy Act, 124 U. Pa.

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