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Cramdown |
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Cramdown The ability of the bankruptcy court to confirm a plan of reorganization over the objections of some classes of creditors. Cramdown In bankruptcy, the ability of a court to formulate and implement a Chapter 11 reorganization plan over and above the objections of creditors. Generally speaking, unsecured creditors object to a debtor's bankruptcy because they have no recourse for retrieving the debt. The rationale behind a cramdown is the fact that unsecured creditors will usually receive part of the debt back under a Chapter 11 reorganization, but would receive nothing in a Chapter 7 liquidation. Cramdown is therefore thought to be the least negative option for both the debtor and the creditors. Courts are required, however, to formulate a cramdown that is as equitable as possible for all parties. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| Myriad issues surround the issue of bankruptcy such as liquidation or cramdown. Cramdown occurs when at least one class of impaired creditors votes to accept the plan and the court confirms it over the objections of a rejecting class. |
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