We use cookies on this site to enable your digital experience. By continuing to use this site, you are agreeing to our cookie policy. close

Exploring The New-Value Exception In Multidebtor Cases

Law360, New York (November 28, 2017, 1:04 PM EST) -- Various courts have invoked a so-called “new-value exception” to the absolute priority rule, which permits existing equity holders to retain their ownership interest in a debtor even where more senior, dissenting classes of creditors are impaired. However, there is a surprising dearth of case law addressing how the new-value exception should be applied in multidebtor bankruptcies. Multidebtor filings are common in large-scale restructurings because often the parent company and most (if not all) subsidiaries need to go through bankruptcy to deleverage the organization’s balance sheet. Given...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.