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 premium CLE webinar with Q&A


Conducted on Tuesday, August 13, 2019

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with a review of 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 Sec. 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 the 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 several 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 review these and other vital 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

Foreman, Michael
Michael E. Foreman

Managing Director and Head of NY Office
Borrelli Walsh

Mr. Foreman is a senior corporate restructuring professional and independent director, who combines major law firm...  |  Read More

Mintz, Benjamin
Benjamin Mintz

Partner
Arnold & Porter Kaye Scholer

Mr. Mintz has extensive transactional and litigation experience and has played active roles in many high-profile...  |  Read More

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