Enforcement of Intercreditor Agreements in Bankruptcy: Cause for Concern?
Author: Martin Bienenstock.; David W. Hillman.
Source: Volume 37, Number 08, August 2021 , pp.115-117(3)
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Abstract:
In a recent bankruptcy decision, In Re Tribune Co., the Third Circuit held that debt subordination agreements need not be “strictly enforced” when confirming a non-consensual chapter 11 plan. The authors discuss the Tribune case, the relevant debt tranches, the plan, and the dispute. They then turn to the lower court decisions and the Third Circuit ruling. They close with four reasons why the Tribune decision does not represent a “seismic shift” on the enforceability of subordination agreements in bankruptcy.Keywords: In re Tribune Co.; Non-Consensual (“Cram Down”) Chapter 11 Plans; Subordination Agreements
Affiliations:
1: Proskauer Rose LLP; 2: Proskauer.