Instead, this covenant allows the creditor
to call its loan should it learn that a non-coordinating contract was written with a later creditor
In its simplest terms, the day a company files a Chapter 11 bankruptcy is the day that company belongs to the creditors
and the plan of reorganization is essentially a plan to purchase the company back from those creditors
Avoiding bankruptcy, because they had enough cash in hand to hold creditors
at bay, were Cendant, Lucent, Mercury Finance, and a host of other companies that reported fattening bottom lines quarter after sizzling quarter until all that profit suddenly evaporated.
R3 research has consistently shown that unsecured creditors
receive minimal returns from insolvent debtors.
Conversely, if done correctly, the formation of a manageable and lean steering committee structure can contribute to much more efficient internal consultations and sharing of information among the creditor
In order to avoid the doctrines of constructive receipt or economic benefit from being invoked against the employee (thereby subjecting the unpaid sums to current tax), the trust must be a grantor trust, the assets of which are subject to claims of the employer's general creditors
From the opening gavel, both secured and unsecured creditors
are working to consolidate as much courtroom muscle as possible.
successfully argued that it could setoff its allowed administrative expense claim, for goods it had provided on credit terms to the debtor after the bankruptcy filing, to reduce any potential preference liability on a dollar-for-dollar basis.
This is certainly not the situation the trade creditor
envisioned when it originally entered into its supply agreement.
A safe harbor for creditors
is plausible--if courts could reduce the extent of creditor
conflict for critical decisions--and would both encourage constructive creditor
intervention and discourage detrimental, value-shifting creditor
So, the next time you decide to ignore a few credit card payments, a creditor
may opt to come calling via your paycheck
In contrast, the allowance of a disputed claim results in a distribution to a newly allowed creditor
that is only partially in excess of the minimum percentage recovery threshold.