A hornbook principle of U.S. bankruptcy jurisprudence is that valid liens pass through bankruptcy unaffected.
Second Circuit Rules That Lien Is Extinguished Under Chapter 11 Only if Secured Creditor Participates in Case
The question of whether the terms of a Chapter 11 plan providing for the treatment of secured creditor claims are binding on non-participating secured creditors has been ongoing. The U.S. Second Circuit recently weighed in on this issue as a matter of first impression.
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