Gibson Dunn discusses Lien-Creditor Rights after Momentive

On October 14, 2014, the Bankruptcy Court for the Southern District of New York issued a bench ruling (as later modified, the “Bench Ruling“) in the In re MPM Silicones, LLC (“Momentive“) Chapter 11 cases (Case No. 14-22503-rdd, Adv. Proc. Nos. 14-08248 [Docket No. 50], 14-08247 [Docket No. 60]), which serves as a stark reminder of the function and importance of carefully drafted and negotiated intercreditor agreements in a Chapter 11 context.  Intercreditor agreements generally govern the rights of multiple classes of creditors vis à vis each other.  A typical intercreditor agreement directs future distributions post-default … Read more