Although many circuit courts of appeal have recognized the existence of a new value exception to the absolute priority rule, the Supreme Court has yet to issue a ruling that expressly adopts this exception, which is also known as the “new value corollary.”
The Evolution of New Value Plans
A recent decision by the Seventh Circuit Court of Appeals, <I>In re Castleton Plaza, LP</I>, has put into question the application of the new value corollary in future Chapter 11 cases.
By
Alan K. Mills, David M. Powlen And Jonathan D. SundheimerThis premium content is locked for The Bankruptcy Strategist subscribers only
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