Applying Absolute Priority Rule — Broad Vs. Narrow Views
April 25, 2013, 1:32 PM EDT
Law360, New York (April 25, 2013, 1:32 PM EDT) -- The revisions to Bankruptcy Code Section 1129 and the addition to the Bankruptcy Code of Section 1115 made by the Bankruptcy Abuse and Consumer Protection Act of 2005 (BAPCPA) have caused inconsistent rulings on whether the so-called "absolute priority rule" still applies to Chapter 11 cases of individual debtors.
The absolute priority rule, initially a judicially created concept to prevent equity interest holders and senior creditors from reaching a deal that would impose unfair plan terms on junior unsecured creditors, is codified in 11 U.S.C. §...