Creditors that file motions to dismiss or convert pursuant to 11 U.S.C. § 1112 [1] to reduce delay by debtors must generally avoid continued hearings in subchapter V cases. [2] The § 1112 motion requires the debtor to show, in part, that “there is a reasonable likelihood that a plan will be confirmed ...
If a mortgage is ambiguous or contains a mistake, a lender may generally reform the mortgage under state law. [1] But what if a borrower files a bankruptcy petition before a lender does so? In a divided opinion, the U.S. Court of Appeals for the Fifth Circuit confirmed that a lender may not reform a mortgage post-petition. [2] The dissent, however, offers lenders a potential pathway around this prohibition in future cases.
At this year's ABI Annual Spring Meeting, being held April 28-30, 2022, at the JW Marriott in downtown Washington, D.C., the Secured Credit Committee will be partnering with the Asset Sales Committee to present "Challenges Facing Secured Creditors in Asset Sales." This session will focus on covering lenders’ perspectives on chapter 11 strategy and options, such as note sales, out-of-court restructurings or formal bankruptcy sales.
We’ve all seen it, right? Loan documents where a borrower grants a blanket security interest in nearly all of its assets to a lender, including assets that it may acquire in the future? These “after-acquired” security interests in real and personal property are all too familiar to most secured lenders — especially when lending to a sophisticated business with fluctuating assets. Security interests in a borrower’s future assets are intended to provide extra protection to the lender and are enforceable in most contexts.
An oversecured creditor is generally entitled to post-petition interest, to the extent provided for under a loan agreement, as a part of its secured claim in a bankruptcy case.[1] However, courts are split as to (1) whether or not the same applies to interest incurred at a contracted default rate when curing a monetary default through the debtor’s plan of reorganization, and (2) whether equitable considerations allow courts to disallow interest at the agreed-upon, contractual default rate, des
Secured creditors whose collateral includes its borrowers’ accounts are empowered by Article 9 to collect money that is owed to borrowers from their borrowers’ account debtors, by a simple notice process. The secured creditor can notify account debtors of the security interest and advise them that they should pay the secured creditor directly, instead of paying the borrower.