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The U.S. Bankruptcy Court for the Southern District of New York recently considered whether in a multi-debtor Chapter 11 proceeding, a secured lender must be oversecured in respect of collateral held in each individual Chapter 11 estate in order to collect postpetition interest and fees under Section 506(b) 'from that entity' or whether collateral should be aggregated across all debtors for purposes of making the 506(b) determination. The authors explain the case and its implications., Bankruptcy can be unfriendly terrain for a creditor seeking to recover on a claim against a distressed entity. This is the case even for purportedly secured institutional lenders. Indeed, risks [...]

The unitranche financing facility, versus a more traditional two-loan structure, is widely thought to generate efficiencies, ease the process of closing, streamline administrative junctions, and, ultimately, to pass along cost savings to lenders and borrowers. The authors of this article examine unitranche financing facilities, and conclude that while unitranche deals offer clear benefits, there are significant elements of uncertainty associated with such deal structures that the careful practitioner must be aware of in drafting loan documents and advising clients., Unitranche facilities are a relatively recent innovation in the middle market lending sector designed as an alternative to the typical first and second lien loan structure. The unitranche facility, versus [...]

In this article, the authors examine what the changing landscape of Chapter 11 restructuring means for trade creditors of distressed companies. Much has been written in the last few years [...]

The authors of this article explain a recent Delaware bankruptcy court decision which provides parties participating in plan negotiations some reassurance that sharing documents during the course of such negotiations will not make the materials subject to discovery in later litigation., The 'common interest' doctrine allows attorneys representing different clients with aligned legal interests to share information and documents without waiving the work-product doctrine or attorney-client privilege. Issues involving the common-interest [...]

The Chapter 11 case of Quigley Company, Inc. represents one of the more interesting strategies for dealing with asbestos liabilities in Chapter 11. The author discusses the case and explains its lessons., The early 2000s witnessed a wave of Chapter 11 filings by entities with liability for asbestos personal-injury claims. The large number of filings was matched by the variety of legal [...]

The authors examine various issues and arguments for and against the theory for reducing the amount of allowed claims in a bankruptcy arising from convertible debt instruments. Business organizations often [...]