Tag Archives: contribution
How Equity Holders Can Protect Their Interests During Chapter 11
When a company files for Chapter 11 bankruptcy, its existing equity holders (such as shareholders) are typically at the bottom of the repayment hierarchy. In U.S. bankruptcy law, the order of claims is strictly observed: secured creditors are paid first, followed by unsecured creditors, and then, only if anything remains, equity holders receive payment. This […]
When Can Chapter 11 Plans Include Nonconsensual Third-Party Releases?
Nonconsensual third-party releases are clauses in a Chapter 11 reorganization plan that discharge certain non-debtor parties — such as the debtor’s officers, directors, shareholders, insurers, sureties or affiliates — from liabilities owed to creditors. These releases are nonconsensual because they bind creditors who do not consent to them, extinguishing their claims against these third parties. […]
