Equitable Subordination Considerations For Creditors
Law360, New York (July 9, 2015, 10:19 AM EDT) -- A secured lender generally enjoys a relative position of priority when a borrower runs into financial distress. Assuming that the lender’s security interest in the borrower’s collateral is appropriately documented and properly perfected, and that the lender’s claim is oversecured, the secured lender can take some comfort in the fact that bankruptcy principles generally ensure that the secured lender is afforded the same priority that such lender would receive in a nonbankruptcy liquidation of the borrower’s assets, and there is a strong likelihood that its claim...
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