Bankruptcy Risks for Second Lienholders

Overcoming Challenges With Lien Stripping, Sect. 363 Sales, Intercreditor Agreements and More

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, August 27, 2013

Recorded event now available

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Program Materials

This CLE webinar will analyze risks facing second lienholders in bankruptcy, including lien stripping, standing, Section 363 sales free and clear of liens, intercreditor agreements, and valuation of secured creditor’s collateral. The program will outline best practices for minimizing the risks.

Description

Chapter 11 cases involving second liens are particularly challenging for practitioners and courts when the second lien is out of the money. The Third Circuit’s Heritage Highgate case addressed (and approved) the stripping of a second lienholder’s lien under a plan of reorganization.

Other recent cases have ruled on a second lienholder’s standing to object to a sale and whether a court may authorize a sale of property free and clear of second liens. These rulings clarify how second lien debt is treated in Chapter 11 cases when the second lien is out of the money.

Second lienholders also face unique challenges on issues such as rights under intercreditor agreements and the valuation of a secured creditor’s collateral under Section 506(a).

Listen as our authoritative panel of practitioners analyzes risks facing second lienholders in bankruptcy, including lien stripping, standing, Section 363 sales free and clear of liens, intercreditor agreements, and valuation of secured creditor’s collateral. The program will outline best practices for minimizing the risks.

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Outline

  1. Lien stripping
  2. Standing
  3. Section 363 sales free and clear of liens
  4. Rights under intercreditor agreements
  5. Valuation of the secured creditor’s collateral under Section 506(a)
  6. The role of creditors’ committees

Benefits

The panel will review these and other key questions:

  • Does a second lienholder have standing to object to a sale notwithstanding the terms of an intercreditor agreement?
  • Can a court authorize a sale of property free and clear of out-of-the-money liens when the junior lienholders do not consent to the sale?
  • How does valuation of the secured creditor’s collateral impact the ability of the debtor to strip junior liens?
  • What impact has the Heritage Highgate ruling had on the role of creditors’ committees in the reorganization process?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Vincent J. Roldan
Vincent J. Roldan

Vandenberg & Feliu

He concentrates his practice in bankruptcy matters and creditors' rights. He has represented parties in interest...  |  Read More

Matthew P. Ward
Matthew P. Ward

Partner
Womble Carlyle Sandridge & Rice

He has represented many public and private companies as debtors in Chapter 11 cases as well as representing official...  |  Read More

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