In today’s economic environment, the rights of secured creditors have become a hot topic around the figurative dinner table of bankruptcy professionals.  Inevitably, this conversation includes a discussion of those Bankruptcy Code provisions intended to protect the rights of secured creditors, including:

“…to be my student, you must develop a taste for victory.”

 Pai Mei, Kill Bill

Judge Drain’s recent bench rulings in Momentive Performance Materials in 2014 generated a great deal of controversy in the distressed debt world.  Distressed investors, lenders, and commentators have questioned whether the Momentive rulings will lead to an industry trend in which debtors seek to cram down their secured lenders to take advantage of the ability to do so at below market interest rates.  

This installment of the Weil Bankruptcy Blog’s series on the ABI Commission Report is the second of two posts that address the Commission’s recommendations relating to postpetition financing.

This installment of the Weil Bankruptcy Blog’s series on the ABI Commission Report is the first of two posts that address the Commission’s recommendations relating to postpetition financing.  This post covers the Commission’s recomm

A recent decision out of the United States Court of Appeals for the Second Circuit serves as a powerful reminder of why lawyers are taught to take care in even the most ministerial of tasks. In Official Comm. of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A.

There has been quite a lot of discussion over the past few months about the bench rulings issued by Judge Drain of the Bankruptcy Court for the Southern District of New York inMomentive Performance Materials (see our extensive coverage in four parts here, 

On August 26, 2014, Judge Drain, of the Bankruptcy Court for the Southern District of New York, concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders. This four-part Bankruptcy Blog series will examine Judge Drain’s rulings in detail, with Part I of this series providing you with a primer on cramdown in the secured creditor context.

Secured creditors naturally want to be repaid. Sometimes secured creditors go as far as asking a debtor to waive its right to seek bankruptcy protection. Although such clauses are frequently held to be unenforceable, we previously have discussed exceptions for LLCs.

As a general rule, absent an express agreement to the contrary, expenses associated with administering the bankruptcy estate, including pledged assets, are not chargeable to a secured creditor’s collateral or claim but must be paid out of the estate’s unencumbered assets. Recognizing, however, that the bankruptcy estate may be called upon to bear significant expense in connection with preserving or disposing of encumbered assets as part of an overall reorganization (or liquidation) strategy, U.S.