A recent decision by the United States Bankruptcy Court for the Southern District of New York¹ found that a UCC-3 termination statement filed on behalf of a secured creditor was not effective because it lacked the proper authorization.

The current cycle of Chapter 11 corporate bankruptcies involves many cases where the debtor seeks to achieve a balance-sheet restructuring by converting debt into equity. When consensus cannot be achieved, junior stakeholders (i.e., second lien creditors, unsecured creditors and/or equity) will often contest plan confirmation on the grounds that the proposed plan provides more than 100% recovery to the senior creditors. Valuation plays the central role in these cases.