Photo of Evelyn Meltzer

Evelyn Meltzer

Subscribe to Evelyn Meltzer's Posts

Evelyn focuses her practice on corporate bankruptcy, insolvency, distressed M&A, and creditors’ rights. With more than 20 years of experience, Evelyn understands all facets of a problem or opportunity, strategically devising insightful, innovative, and practical solutions that protect and advance her clients’ interests.

Contact:Read more about Evelyn Meltzer

The Absolute Priority Rule, as outlined in Section 1129(b)(2) of the Bankruptcy Code, plays a crucial role in Chapter 11 bankruptcy cases. It stipulates that claims of a higher priority must be paid in full before lower priority claims can receive any recovery. This rule also requires that all creditors must be paid in full before equity interest holders can retain any interest in the debtor or receive any distribution under the plan. The priority of a creditor’s claim, therefore, determines the extent to which they can expect to be paid under a confirmed Chapter 11 plan.

Selling a claim in a bankruptcy case can offer several advantages. It provides an opportunity for immediate payment, which can be beneficial as the resolution of claims in bankruptcy cases can often take months or even years. Selling also ensures payment in cash, eliminating the risk of receiving other forms of distributions such as stock or promissory notes. Additionally, it guarantees a certain amount, removing the uncertainty that often comes with bankruptcy distributions. Lastly, selling a claim can save time and expense as it eliminates the need to monitor the bankruptcy case or hire an attorney to protect your rights.

In this article from our Creditor’s Right Toolkit series, we discuss the process of Section 363 sales. A Section 363 bankruptcy sale, as defined by the Bankruptcy Code, involves the sale of a company’s assets, which the Bankruptcy Court approves if the debtor can demonstrate a “substantial business justification.”

This article, part of our Creditor’s Rights Toolkit series, serves as an essential guide for vendors navigating the complex landscape of dealing with financially distressed or bankrupt customers. It provides a detailed exploration of the options available to vendors who are proactive and quick to act when they learn of their customer’s financial woes.

This article, part of our Creditor’s Rights Toolkit series, discusses strategies for businesses to protect themselves when they suspect a customer might file for bankruptcy. These strategies include:

Obtaining a Deposit: This makes the business a secured creditor, which often get paid in full in a bankruptcy case, unlike unsecured creditors.

Establishing Payment in…

Understanding the complex interplay between successor liability and bankruptcy law is crucial for creditors seeking to recover debts. In this article in our Creditor’s Toolkit series, we dissect the nuances of Section 363(f) of the Bankruptcy Code, which typically exempts bankruptcy sales from successor liability, while also shedding light on the exceptions to this rule.