On August 26, 2014, the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) issued a notable decision in the chapter 11 cases of MPM Silicones, LLC and its affiliates (the “Debtors”) that could have far-reaching implications for future chapter 11 cases, particularly as it strengthens a debtor’s ability to cram down a dissenting class of secured creditors with new secured debt at a below market interest rate.
The Bankruptcy Court issued rulings on three issues that could negatively impact creditors in future cases:
The Bankruptcy Court held that the appropriate interest rate for debt to … Read more
On June 9, 2014, the U.S. Supreme Court issued its decision in Executive Benefits Ins. Agency v. Arkison, which partially resolved procedural uncertainty created by the Court’s prior decision in Stern v. Marshall.
In Stern, the Supreme Court analyzed the constitutionality of 28 U.S.C. § 157, which in relevant part defines certain matters as “core” or “non-core,” and authorizes bankruptcy courts to finally adjudicate “core” matters but only to issue findings and conclusions subject to de novo review in “non-core” matters. The Court held that Article III of the U.S. Constitution prohibits Congress from vesting bankruptcy judges … Read more