My latest thoughts on chapter 11 are now up on Dealbook.
Comments
One response to “The Bankruptcy Courts Fight Back?”
Robert White
Expediting a non-plan sale outside the protection to creditors afforded by the rest of chapter 11 ought to be seen as a clear violation of the intent and language of the Code.
Section 1106 (a)(5) requires that a trustee shall –
as soon as practicable, file a plan under section 1121 of this title, file a report of why the trustee will not file a plan, or recommend conversion of the case to a case under chapter 7, 12, or 13 of this title or dismissal of the case;
Every expedited non-plan sale I know of skips the report why no plan will be filed and jumps to the sale without giving the rest of chapter 11 protections (like absolute priority) to non-lienholders.
My point is that the careful balance of benefits and protections struck between debtors and creditors in chapter 11 is completely sacrificed in an expedited non-plan sale.
Once you try to justify why junior vs senior secured creditors ought to control the expedited bidding procedures you have already violated the code.
Comments
One response to “The Bankruptcy Courts Fight Back?”
Expediting a non-plan sale outside the protection to creditors afforded by the rest of chapter 11 ought to be seen as a clear violation of the intent and language of the Code.
Section 1106 (a)(5) requires that a trustee shall –
as soon as practicable, file a plan under section 1121 of this title, file a report of why the trustee will not file a plan, or recommend conversion of the case to a case under chapter 7, 12, or 13 of this title or dismissal of the case;
Every expedited non-plan sale I know of skips the report why no plan will be filed and jumps to the sale without giving the rest of chapter 11 protections (like absolute priority) to non-lienholders.
My point is that the careful balance of benefits and protections struck between debtors and creditors in chapter 11 is completely sacrificed in an expedited non-plan sale.
Once you try to justify why junior vs senior secured creditors ought to control the expedited bidding procedures you have already violated the code.