Client Alert
In a decision that may ease the resolution of future bankruptcy proceedings, the Third Circuit Court of Appeals affirmed a Delaware bankruptcy court’s approval of a sale of substantially all of a debtors’ assets that was predicated on a settlement in which the secured creditors gifted funds to general unsecured creditors, while bypassing creditors holding more senior claims. Despite the obvious tension with the “absolute priority rule” that is at the core of the Bankruptcy Code’s distribution scheme, the Court held that because the funds came directly from the secured creditors without ever becoming estate property, the absolute priority rule could not be invoked to block the payment.

We have always been focused on finance.

  • 1913
    TS Chapman partners with Henry Cutler to form Chapman and Cutler
  • 1st
    Chapman's first client in 1913 is still a client of the firm today
  • 22
    Diverse financial practices serving regional, national, and global clients
  • 6
    Offices across the country and in key US financial centers

We use cookies to deliver our online services. Details of the cookies we use and instructions on how to disable them are set out in our Privacy Policy. By using this website you agree to our use of cookies.