5th Circ. Stirs The Artificial Impairment Pot

Law360, New York (March 8, 2013, 6:38 PM EST) -- Imagine this scenario: A real estate holding company in Chapter 11 owes its secured lender approximately $32.1 million on a project with a value estimated at $34 million. The equity owners are willing to inject additional capital to keep the project, but the secured lender wants to foreclose. The holding company proposes a plan of reorganization in which the secured lender receives a new note for the full amount if its debt, and a class of unsecured trade creditors holding approximately $60,000 in pre-petition debt receives...
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