Case Study: In Re Lower Bucks Hospital

Law360, New York (June 13, 2012, 12:29 PM EDT) -- A recent decision by a Philadelphia bankruptcy judge highlights the obstacles faced by an indenture trustee seeking to obtain, through a Chapter 11 plan, a third-party release from its bondholders. In In re Lower Bucks Hospital, et al.[1], the judge, citing what he felt was inadequate disclosure, denied the release, even though the judge had previously approved a settlement incorporating the release, and despite the fact that the affected bondholders had overwhelming voted in favor of the plan which included the release.

The lesson learned (the...
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