How To Negotiate A Ch. 11 Plan Support Agreement

Law360, New York (October 16, 2013, 4:37 PM EDT) -- Before initiating a Chapter 11 proceeding to implement an agreed-upon restructuring, a company will seek binding assurances from the creditors who the company negotiated with that such creditors will support the proposed transaction.

In order to “lock up” the support, the company and those creditors often enter into a plan support agreement, which also is referred to as a “restructuring support agreement” or a “lockup agreement.” The plan support agreement generally provides that the creditors will support and not vote against the proposed restructuring. In turn,...
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