cram down


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Cram Down

To force an investor to accept a deal he/she considers unfair. For example, in a hostile takeover, some shareholders may be forced to accept junk bonds instead of cash in exchange for their stock. Likewise, in an uncovered option, the writer may be forced to purchase the underlying asset at a price that is far away from the prevailing market price. Usually, cramming down occurs when an investor is legally obliged to accept a deal, or when not taking the deal would result in an even greater loss.

cram down

Relating to a business deal in which a group of investors is forced to accept an undesirable arrangement. For example, minority shareholders of a company being bought out may have to accept less than what they consider a fair price for their stock.

cram down

A bankruptcy tool used by debtors to force creditors to agree to a plan of reorganization in Chapter 11.If the requisite minimum number of votes have been obtained to approve a plan of reorganization, and if the plan provides better protections or payments to the nonconsenting creditors than they would receive in a liquidation,then the court may “cram down”the plan and all will be bound by its terms.

References in classic literature ?
His determination to cram down their throats, or put "bodily into their souls" his own words, elicits a cry of horror from Socrates.
I am an old man, and I tell you here, sire, to you, my king, things which I would cram down the throat of any one who should dare to pronounce them before me.
We have no intention of any sort of liquidation, cram down or write off.
Cram down mechanisms have been introduced or proposed in several jurisdictions in recent years, including Singapore and England.
Finally, in the more complicated cram down or lien strip case, where the lien strip or cram down is not fully effectuated until discharge, additional billing statement challenges may arise.
They aided in facilitating a 50% cram down of the payoff quote, and offered the investor a $1 million loan.
When it took two men to cram down the safety bar on a roller coaster at Alton Towers, I forced a smile.
In those situations, bankruptcy may be needed to bind the minority dissident lenders through the plan voting process, or to cram down the "out of the money" lender tranche.
Food was something I had to cram down my neck to make sure I didn't fall over at the pub.
Together, these provisions set the stage for cram down hearings.
Mr Short became "angry" and made himself a sandwich out of a french baguette and pt, which he began to cram down his throat.
Aside from the humanitarian issues, there were very pragmatic reasons for supporting the legislation because the alternative to a cram-down for a credit union in bankruptcy court will usually be worse than any cram down would have been by a bankruptcy judge under the proposed, now defeated, legislation.