Avoiding Forfeiture Of Estate From Ch. 7 Conversions

Law360, New York (June 27, 2007, 12:00 AM EDT) -- The ability to borrow money during the course of a bankruptcy case is an important tool available to a chapter 11 debtor-in-possession. Often times, the debtor’s most logical choice for a lender is one with an existing pre-bankruptcy relationship with the debtor.

As a condition to making new loans, however, lenders commonly require the debtor to waive its right to pursue avoidance or lender liability actions against the lender based upon pre-bankruptcy events.

Normally, this type of waiver does not prohibit official creditors’ committees from bringing...
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