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Cramdown Interest Rates in Chapter 11
In Till v. SCS Credit Corp., 541 U.S. 465 (2004), the U.S. Supreme Court applied a formula to determine the appropriate cramdown interest rate with respect to the treatment of secured claims in a Chapter 13 case ' holding that the appropriate interest rate is determined by taking a risk-free base rate, such as the prime rate or the Treasury rate, and adding a risk premium of between 1% and 3% to reflect the repayment risks unique to the particular debtor. However, Till left an unanswered question about how to determine an applicable cramdown interest rate for allowed secured claims in Chapter 11 cases.
Since Till, courts have relied on language contained in footnote 14 in Till to provide guidance on how such a rate should be determined in Chapter 11 cases. Footnote 14, in substance, states that while there is no readily apparent Chapter 13 cramdown interest rate because there is no free market of Chapter 13 cramdown lenders, the same may not be true in Chapter 11 because lenders advertise financing for Chapter 11 debtors-in-possession. This has opened the door to arguments about the use of market rates to determine cramdown interest rates in Chapter 11 cases. However, questions still remain over how and when to apply either a market interest rate or formula-based rate in Chapter 11 cases.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.