They were well aware of these inherent uncertainties in implementing the
absolute priority rule in a nonmarket environment.
Chapter 11 of the Bankruptcy Code is organized around the
absolute priority rule.
The
absolute priority rule of Chapter 11 (Section 1129 of the Bankruptcy Code) provides that a class of junior creditors cannot receive a dividend on its claims until all senior creditor classes are paid in full.
Assuming that the
absolute priority rule prevails and that liquidation is immediate upon default, we determine the firm's interior optimal priority structure along with its optimal capital structure.
94) Lastly, the Objecting Creditors argued that the [section] 363 sale impermissibly subordinates their interests to the interests of unsecured creditors in violation of the
absolute priority rule and 11 U.
The fair and equitable requirement, which embraces the
absolute priority rule, is a vertical inquiry that mandates a plan to pay a class in full before any class junior to it receives a distribution (unless the senior class consents).
3) One area of confusion has been the
absolute priority rule in section 1129 (4) of the U.
Accordingly, unlike some reorganization plans, all liquidating plans should distribute the remaining assets to creditors and interest holders in the order of their legal priority without a junior class of creditors or interest holders that is favored over a more senior class because of the inability to satisfy the "new value exception" to the
absolute priority rule.
We will consider how deficient rules for corporate debt workouts, and in particular violation of the
absolute priority rule (APR), undermine the ability of both domestic banks to make credit decisions on the corporate level and foreign banks to make discriminations among domestic banks in the interbank market.
The Bankruptcy Code protects creditors against coercion by providing guarantees to the dissenting creditors: a guarantee of at least its liquidation payoff to the dissenter in a class and the
absolute priority rule to the class subject to cram down.
deviations from the
absolute priority rule in modern reorganization
The reason that creditors may end up owning the company under chapter 11 is the
absolute priority rule, enunciated in 11 U.
