Current issues in prepackaged Chapter 11 plans of reorganization and using the Federal Declaratory Judgment Act for instant reorganizations
Article Abstract:
Prepackaged bankruptcy reorganizations are used to reduce the amount of time spent in reorganization proceedings. The procedure involves securing acceptance of the reorganization plan by creditors and shareholders before filing the Chapter 11 petition. The process could be streamlined even further by using the Federal Declaratory Judgment Act to obtain a declaratory judgment confirming the plan before the bankruptcy petition is filed. The unsuccessful attempt to file a prepackaged plan by Southland Corp illustrates the legal ambiguities involved.
Publication Name: Annual Survey of American Law
Subject: Law
ISSN: 0066-4413
Year: 1992
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A theory of absolute priority
Article Abstract:
Equity owners frequently retain control of a bankrupt company in spite of the absolute priority rule which puts the interests of creditors first. Control of the business is an asset of the estate, which should be sold for the best price possible to increase the estate's value. However, previous owners may often be the only parties interested. Old equity should not be barred from participating in the reorganized company, but the transaction should be closely monitored by creditors and courts to see that estate value is enhanced.
Publication Name: Annual Survey of American Law
Subject: Law
ISSN: 0066-4413
Year: 1992
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Commentary on Professor Warren's paper: absolute priority
Article Abstract:
The presentation on absolute priority in bankruptcy by Elizabeth Warren is the subject of comments and open discussion by participants in a bankruptcy law symposium held at New York University School of Law, Apr 12, 1991. Warren is criticized for emphasizing creditor interests and neglecting the purpose of bankruptcy law to rehabilitate businesses. It is pointed out that Chapter 11 should not be regarded as a sale.
Publication Name: Annual Survey of American Law
Subject: Law
ISSN: 0066-4413
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
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