recharacterization

Mandatory Subordination: How Even A Money Judgment Can Be Treated Like Equity In Bankruptcy

Bob Eisenbach — Tue, 14 Apr 2015 15:14:21 +0000

When an insolvent entity files for bankruptcy, it can be tough to be a creditor. But holding equity — stock in a corporation or a membership interest in an LLC, a limited liability company — can be even worse. Under bankruptcy’s “absolute priority rule,” creditors generally must be paid in full before equity gets anything. That usually means that holders of equity, or claims treated as equity…

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Winter 2014 Edition Of Bankruptcy Resource Now Available

Bob Eisenbach — Thu, 02 Jan 2014 19:10:42 +0000

I hope you had a wonderful holiday season and Happy New Year everyone. To start the new year off, the Winter 2014 edition of the Absolute Priority newsletter, published by the Bankruptcy & Restructuring group at Cooley LLP, of which I am a member, has been released. The newsletter gives updates on current developments and trends in the bankruptcy and workout area. Follow the links in this…

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Ninth Circuit Opens The Door To Recharacterization Of Debt As Equity

Bob Eisenbach — Wed, 08 May 2013 16:52:06 +0000

In bankruptcy, prepetition loans made by insiders are often investigated, and sometimes challenged, by debtors, creditors’ committees, or trustees. The two most frequent challenges brought are that (1) the loans in question are not really debt and should be recharacterized as equity, and (2) the debt should be equitably subordinated below the claims of all or some other creditors.

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Summer 2012 Edition Of Bankruptcy Resource Now Available

Bob Eisenbach — Thu, 26 Jul 2012 17:57:25 +0000

The Summer 2012 edition of the Absolute Priority newsletter, published by the Bankruptcy & Restructuring group at Cooley LLP, of which I am a member, has now been released. The newsletter gives updates on current developments and trends in the bankruptcy and workout area. Follow the links in this sentence to access a copy of the newsletter. You can also subscribe to the blog to learn when future…

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Winter 2012 Edition Of Bankruptcy Resource Now Available

Bob Eisenbach — Mon, 13 Feb 2012 13:42:21 +0000

The Winter 2012 edition of the Absolute Priority newsletter, published by the Bankruptcy & Restructuring group at Cooley LLP, of which I am a member, has recently been released. The newsletter gives updates on current developments and trends in the bankruptcy and workout area. Follow the links in this sentence to access a copy of the newsletter. You can also subscribe to the blog to learn when…

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Second Liens And Recharacterization: Is More Litigation Around The Corner?

Bob Eisenbach — Mon, 20 Oct 2008 01:03:29 +0000

In many Chapter 11 bankruptcy cases, unsecured creditors investigate whether a basis exists to recharacterize existing secured debt as equity. The reason? A successful challenge can turn first or second lien secured debt into "back-of-the-line" capital contributions, enabling unsecured creditors to realize a much greater recovery. A recent article by two of my Bankruptcy &

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