The new value exception: a plea for modification or elimination

Article Abstract:

The absolute priority rule was codified by Congress in the 1978 Bankruptcy Code without including the new value exception which allowed junior creditors to retain an interest in the bankrupt entity if they added to its value. The absence of the new value exception in the Code increase concerns about its validity while continued confusion about its requirements limit its usefulness. Therefore, another reorganization assistance method is advisable that both Congress and the courts accept, such as giving junior creditors the value of new contributions as interest in the entity.

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Show me the money: the debate over creditors' postpetition attorneys' fees

Article Abstract:

Creditors' right to collect attorneys fees during proceedings to recover unsecured claims should be allowed under a correct reading of Bankruptcy Code section 506(b), but courts have offered conflicting views. The US 2d Circuit Court of Appeals decision in United Merchants & Manufacturers, Inc. v. Equitable Life Assurance Society supports the collection of fees. This view should prevail over the US Bankruptcy Court for the Southern District of Texas decision in Sakowitz, Inc. v. Chase Bank International.

Attorneys, Lawyers' fees

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The economic case for judicial deference to break-up fee agreements in bankruptcy

Article Abstract:

An economic analysis of break-up fee agreements suggests that bankruptcy courts should rule in favor of their validity. Break-up fee agreements have often been rejected by bankruptcy courts on the grounds they will decrease the value of a company. However, break-up fee agreements increase the incentive for a potential buyer to bid on a company. Break-up fees are paid by the seller if a transaction fails.

Contracts

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