Bankruptcy Section 1111(b)(2) Elections, Plan Feasibility, and Cramdown Interest Rate Complexities

Navigating Advantages for Secured Lenders and Potential Traps for Debtors

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


Conducted on Wednesday, September 9, 2015

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with a review of the scope of the Section 1111(b)(2) election for secured lenders and the impact of the election on cramdown strategies. The program will also discuss cramdown interest rates and the impact rates have on cramdown strategies.

Description

While the use of the §1111(b)(2) election by lenders has increased in recent years, the election remains considerably misunderstood. The election is more relevant as real estate values increase and show promise for appreciating to pre-financial crisis levels.

Sec. 1111(b)(2) makes most sense when the lender seeks to benefit from future appreciation of values so they cover the entire value of the loan plus accrued interest—the value of the election claim. The appropriate cramdown interest rate plays a critical role in determining the value of the lender’s claim.

There are a number of strategic decisions in a lender’s determination of whether to make the election. Real estate owners have to understand these decisions to determine whether a lender’s §1111(b) election can undermine the owner’s cramdown objectives.

Listen as our authoritative panel of bankruptcy practitioners discusses the §1111(b)(2) election for secured lenders, strategies for lenders in determining whether to make the elections, and cramdown strategies for debtors who face an election by its lenders. The program will also discuss cramdown interest rates and the impact rates have on cramdown strategies.

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Outline

  1. Scope of the §1111(b)(2) election
  2. Strategies for secured lenders in considering the election
  3. Impact of the election on the debtor’s cramdown plan
  4. Impact of cramdown interest rates on cramdown strategies

Benefits

The panel will address these and other key questions:

  • What opportunities does the §1111(b)(2) election present for secured lenders facing cramdown by the property owner?
  • What must real estate owners understand about the §1111(b) election to determine whether a lender’s election can undermine the owner’s cramdown objectives?
  • What impact does the cramdown interest rate play in determining the value of the lender’s §1111(b)(2) election claim?

Faculty

Michael E. Foreman
Michael E. Foreman

Partner
ForemanLaw

Mr. Foreman is a restructuring lawyer, with considerable experience and expertise in financial restructuring and...  |  Read More

Benjamin Mintz
Benjamin Mintz

Partner
Kaye Scholer

Mr. Mintz’s practice is focused on representations of corporate and individual debtors in and out of...  |  Read More

Other Formats
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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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