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.

10 minute read May 24, 2013 at 10:16 AM

Alan K. Mills, David M. Powlen And Jonathan D. Sundheimer

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.”

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