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Section 510 of the Bankruptcy Code recognizes that agreements between creditors of a debtor that one creditor’s claim will be subordinated in payment to another creditor’s claim will be enforceable in a bankruptcy case. As is often the case, over the years bankruptcy and finance practitioners expanded the concept of payment subordination in these agreements to include many terms anticipating any and every action and right the subordinated creditor may take or have in the bankruptcy case. So what provisions in a subordination agreement can be enforced, and can the subordinated creditor participate in the reorganization process if there is no prospect it will receive any distribution as a result of being subordinated?
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By Steven B. Smith and Silvia Stockman
This article explores the competing factors the Bankruptcy Court considered and the rationale underlying its decision to grant the drastic relief of dismissing the NRA’s bankruptcy case.
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How is administrative claim status obtained in a bankruptcy case, and what risks does a service or goods supplier take by continuing to do business with the debtor after commencement of the bankruptcy case?
By Rudolph J. Di Massa Jr. and Drew S. McGehrin
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