cram down


Also found in: Wikipedia.

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.
This fact helps to explain why there is no readily apparent Chapter 13 "cram down market rate of interest": Because every cramdown loan is imposed by a court over the objection of the secured creditor, there is no free market of willing cramdown lenders.
"We have no intention of any sort of liquidation, cram down or write off.
The ability to bind minorities within a specific class of creditors or members is sometimes referred to as a 'cram down'.
Claimants in the other bankruptcies that have settled have signed on to the settlements, but in the Milwaukee case claimants are adamantly opposed, leaving open the possibility of a "cram down," a term used in bankruptcy court to describe an imposed rather than mutually accepted agreement.
In a process known as the "cram down," such restructuring actually can be forced on the secured creditor.
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.
Not Lane Weinholz's carabineers and big hands--he calls rock-climbing "reverse-mining." All the Up There we cram Down Here.
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.