Valuation of secured claims in a bankruptcy reorganization: eating with the hounds and running with the hares
Article Abstract:
The use of a commercially reasonable disposition standard for valuation of secured claims in bankruptcy reorganization cases is a better approach than using retail, replacement, or going concern values, which are unfair to unsecured creditors and at odds with other Bankruptcy Code provisions. Since there is no statutory preference for a particular valuation standard, a case-by-case determination of the standard becomes necessary. The use of a commercially reasonable disposition standard is more in line with other Code provisions and may assist unsecured creditors via funds devolving to the bankruptcy estate.
Publication Name: Commercial Law Journal
Subject: Law
ISSN: 0010-3055
Year: 1995
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'New value' exception divides bench, bar
Article Abstract:
The Bankruptcy Code of 1978 codified the absolute priority rule's 'new value' exception, and there has been a trend towards judicial acceptance of this rule. This exception makes it possible for the debtor to retain ownership absent the consent of all creditors by using a nonmarket transaction to buy back the company at an undervalued price. Creditors argue that they are in the best position to decide if a proposed reorganization plan deals with them fairly and should retain that right.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1993
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'Rash' ruling should not afflict Ch. 11 valuations; Supreme Court ruling ought not be read as having acute impact on discretion to assess assets
Article Abstract:
Bankruptcy court discretion in confirming collateral valuations has been limited in the Supreme Court case of Associates Commercial Corp. v. Rash. The move toward the interests of unsecured creditors has been perceived by some as a major departure form existing precedent. Whatever the effect, the case which formed the basis for the court's departure from prior rulings is considered atypical and unlikely to support similar rulings in the majority of Chapter 13 cases.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1997
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