Publications
Trend Watch: The Safety Of Reorganization Financing
July 9, 2012
Chapter 11 creditors' committees and debtors continue to challenge lenders' prepayment premiums, commitment fees and post-bankruptcy interest claims in reorganization cases. Nevertheless, courts regularly reject these challenges in well-reasoned decisions. This article focuses on two recent decisions: In re Fleetwood Enterprises Inc. (9th Cir. BAP June 5, 2012) (held, lenders' commitment paid by Chapter 11 debtors pursuant to court order not subject to "turnover") and In re Madison 92nd Street Associates LLC (Bankr. S.D.N.Y. June 5, 2012) (overruled debtor's challenges to lender’s (a) prepayment premium and (b) calculation of postpetition, pendency interest).
