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  • videocam On-Demand
  • signal_cellular_alt Intermediate
  • card_travel Bankruptcy
  • schedule 90 minutes

Chapter 11: Options for Reinstating Accelerated Debt After a Monetary Default

Lender Strategies to Avoid Being Sidelined During Confirmation; Debtor Strategies for Keeping Low Interest Loans

$297.00

This course is $0 with these passes:

CLE
ALL
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About the Course

Introduction

This CLE webinar will discuss whether and how Chapter 11 debtors can reinstate attractive loans, even those accelerated pre-petition, while at the same time preventing the lender from objecting to confirmation. The panel will review debtor and lender positions regarding what has to be done, how to determine the cost of reinstatement, timing, and payment as well as disparate views on a similar question of whether an unsecured claim is "unimpaired" by a plan if the claim's treatment does not include post-petition interest.

Description

Debtors can preserve low interest rate obligations as part of a restructuring by reinstating defaulted loans through the plan of reorganization. Reinstatement also provides powerful strategic benefits to a debtor—by unimpairing the lender, the debtor effectively sidelines the lender from objecting to confirmation of the plan. Therefore lenders often put up roadblocks to reinstatement.

The issue that continues to vex lenders, debtors, and the courts is to what extent borrowers must honor all their prepetition contractual obligations to satisfy the Bankruptcy Code’s reinstatement requirements, specifically and especially, any obligation to pay default interest rates and fees. The Bankruptcy Code's reinstatement conditions are anything but straightforward, requiring counsel and the court to decipher the interplay of Bankruptcy Code Sections 1124, 365, and 1123--all ambiguous and complex.

An analogous issue arises in the context of an unsecured claim that is treated as unimpaired by a plan that does not include post-petition interest. Such treatment may allow equity-holders to recover before creditors are truly made whole and prevents such “unimpaired” creditors from voting to reject the plan. Once again, parties must grapple with multiple Code sections to analyze the issue.

Listen as this preeminent panel offers insights and welcome clarity on the exceedingly difficult and important issues surrounding reinstatement of loans.

Presented By

Adam P. Haberkorn
Counsel
O'Melveny & Myers LLP

Mr. Haberkorn is a corporate counsel in O’Melveny’s New York office who focuses his practice on advising clients in in-court and out-of-court restructurings and in executing complicated financing transactions. He has extensive experience in corporate bankruptcy-related matters, and has represented debtors, creditors, lenders, purchasers, and other parties-in-interest in a wide variety of industries.

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Daniel S. Shamah
Partner
O'Melveny & Myers LLP

Mr. Shamah is a premier restructuring lawyer who is universally lauded by peers and clients for his expertise in complex restructuring and insolvency matters. Not only is he adept at conventional bankruptcy and restructuring proceedings, he is also an experienced litigator and handles disputes surrounding some of the most complex commercial and financial instruments across a broad range of industries and practices. Because of Mr. Shamah’s creative approach and exceptional knowledge base, leading financial institutions, private equity sponsors, hedge funds and public and private companies call on him to help them navigate a host of bankruptcy and restructuring issues. From lender liability and fraudulent conveyances to distressed debt investments and complex commercial litigation, he has achieved successes for his clients in every type of restructuring scenario—and his track record proves it.

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Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

Date + Time

  • event

    Tuesday, December 19, 2023

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

  1. Secured loans
    1. Benefits of reinstatement to debtors
    2. Lender opposition to reinstatement
    3. Statutory basis for reinstatement in plan of reorganization
    4. Harmonizing the relevant Bankruptcy Code provisions
    5. Current cases
    6. Unresolved issues
  2. Unsecured loans and post-petition interest

The panel will review these and other key issues:

  • What defaults must be reinstated in order to "unimpair" a secured creditor?
  • Do Sections 1124(2)(A) and 365(b)(2)(D) create an exception to Section 1123(d)?
  • What types of unique state law considerations affect the analysis?
  • Can default interest and fees be challenged as an unenforceable penalty?