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In Bankruptcy, Who Is Left Holding the Bag for Latent Damage Claims?

By David A. Samole
June 01, 2016

Increasingly, true reorganizations under Chapter 11 are the exception, not the rule, as corporate debtors utilize bankruptcy sales to maximize asset value and pay creditors. This trend blurs the line between reorganizations and liquidations, as many Chapter 11 filings repurpose the disposition of assets via going-concern sales to purchasers without associated liabilities and interests, which attach to sale proceeds payable to administrative expenses, lienholders, unsecured creditors and equity.

The Bankruptcy Economy

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