Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Preserving Bargained for Contractual Entitlements In a Cure and Reinstate Plan
Consider the following scenario: Debtor Co. and Finance Co. are parties to an equipment finance lease governing certain equipment used by Debtor Co. in the operation of its business. Prior to the petition date, certain monetary and monetary defaults occurred under the contract, which under the terms of the contract and applicable non-bankruptcy law, entitled Finance Co. to accelerate the debt. Post-petition, Debtor Co. resumes payments under the contract and proposes a chapter 11 plan of reorganization that states it will pay or dispute claims under the contract in the ordinary course of business. The plan classifies Finance Co. as unimpaired. Great news, right? Not so fast.
Section 1124(1) of the Bankruptcy Code provides that a claim is unimpaired if the plan "leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder of such claim or interest." Alternatively, under Section 1124(2), a debtor can render a claim unimpaired by satisfying the relevant requirements enumerated in Section 1124(2)(A) – (E). Broadly stated, in order for a claim to be classified as unimpaired, Section 1124(2) requires a debtor to cure defaults, reinstate the maturity date, compensate the creditor for certain losses, and not otherwise alter the creditor's legal, equitable, or contractual rights
Pursuant to Section 1126(f), creditors in an unimpaired class are conclusively presumed to have accepted the plan If a plan classifies a creditor as unimpaired, the creditor is not entitled to vote on the plan, which minimizes its leverage in the plan process.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
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
How Secure Is the AI System Your Law Firm Is Using?
In a profession where confidentiality is paramount, failing to address AI security concerns could have disastrous consequences. It is vital that law firms and those in related industries ask the right questions about AI security to protect their clients and their reputation.
The Power of Your Inner Circle: Turning Friends and Social Contacts Into Business Allies
Practical strategies to explore doing business with friends and social contacts in a way that respects relationships and maximizes opportunities.
Pleading Importation: ITC Decisions Highlight Need for Adequate Evidentiary Support
The International Trade Commission is empowered to block the importation into the United States of products that infringe U.S. intellectual property rights, In the past, the ITC generally instituted investigations without questioning the importation allegations in the complaint, however in several recent cases, the ITC declined to institute an investigation as to certain proposed respondents due to inadequate pleading of importation.
Compliance and Third-Party Risk Management
To gauge the level of risk and uncover potential gaps, compliance and privacy leaders should collaborate to consider how often they are monitoring third parties, what intelligence they are gathering with and about their partners and vendors, and whether their risk management practices have been diminished due to cost and resource constraints.
Authentic Communications Today Increase Success for Value-Driven Clients
As the relationship between in-house and outside counsel continues to evolve, lawyers must continue to foster a client-first mindset, offer business-focused solutions, and embrace technology that helps deliver work faster and more efficiently.