With the commencement of a Chapter 11 reorganization comes the automatic stay and also a prohibition of the debtor’s use of cash collateral, incurring of new debt, or activity outside the ordinary course without appropriate court orders. Operation of the…
Selected Cases On Claims Designation And Voting Rights In Chapter 11 Reorganizations
Two recent cases highlight reluctance by bankruptcy courts to designate claims of creditors who are on friendly terms with Chapter 11 debtors. Bankruptcy Court in Southern District of Ohio Declines to Designate Claims of Friendly Creditor In a case in…
Creditors Risk Equitable Adjustment of Claims if Overly Involved in Debtor’s Business Affairs
The court in In re Aida’s Paradise, LLC, 485 B.R. 806 (2013) has warned lenders not to become overly involved in a debtor’s business affairs, even if all of its actions are legally permissible. The court cited the Eastern District…