May 26, 2023 Bankruptcy Quiz
Last month, the Boy Scouts of America (BSA) moved closer to exiting from Chapter 11 because...
The Third Circuit denied motions of certain objecting creditors for a stay pending appeal of the plan confirmation order.
The Delaware District Court affirmed the Bankruptcy Court's order confirming the BSA's plan.
The Third Circuit issued an opinion on the merits affirming the lower courts' confirmation of the BSA's plan.
A consensual plan settlement was reached via mediation between the BSA, various victim and tort claimant groups, and other parties-in-interest.
What does § 1129(a)(1) require a Chapter 11 plan to comply with?
Applicable subparts of § § 1129(a) and 1129(b)
Applicable provisions of Chapter 11 of the Bankruptcy Code
Applicable provisions of the Bankruptcy Code
The Bankruptcy Code and state law where the debtor is located
If applicable, what does § 1129(a)(7)'s Best Interests of Creditors Test require?
Rejecting parties receive at least what they would receive in a hypothetical Ch. 7 liquidation conducted on the plan effective date.
All parties receive at least what they would receive in a hypothetical Ch. 7 liquidation conducted on the plan effective date.
All parties receive more than what they would receive in a hypothetical Ch. 7 liquidation conducted on the plan effective date.
All impaired parties receive at least what they would receive in a hypothetical Ch. 7 liquidation conducted on the plan effective date.
The court can confirm a plan if the debtor fails to satisfy 1129(a)(8)’s acceptance requirement.
True
False
True but only if the plan is a liquidating plan
True but only if the plan proposes to pay all creditors in full
The “no unfair discrimination” and “fair and equitable” requirements apply to:
Each class that has rejected the plan
Each impaired class that has rejected the plan
Each class, regardless of whether the class accepts or rejects the plan
Each impaired class, regardless of whether the class accepts or rejects the plan
Which approach did the Supreme Court choose in Till v. SCS Credit Corp?
Coerced Loan Approach
Presumptive Contract Approach
Formula Approach
Cost of Funds Approach
Which of the following best summarizes the formula approach from Till?
Contract rate is adjusted up or down depending on risks, as of the confirmation date, associated with the debtor, collateral, and plan.
Prime rate is adjusted up or down depending on risks, as of the confirmation date, associated with the debtor, collateral, and plan.
Treasury bond rate, commensurate with the repayment term, is adjusted upwards depending on debtor-specific rates.
An appropriate risk-free rate is adjusted to take into account the risks associated with the debtor, collateral, and plan.
Which of the following is true about the Absolute Priority Rule?
Pre-petition equity holders cannot receive equity in the reorganized debtor unless all creditors are to be paid in full.
Pre-petition equity holders can receive equity in the reorganized debtor if they don’t receive it on account of their pre-petition interests.
Pre-petition equity holders can receive equity in the reorganized debtor as long as no party who is senior to such holders objects to the plan.
None of the above.
The Absolute Priority Rule applies in individual Chapter 11 cases.
True
False
True unless it is a Subchapter V Chapter 11 case
It depends
Last week in the BlockFi, Inc. Chapter 11 case, the court scolded BlockFi because BlockFI
Filed a combined plan and disclosure statement without court authorization.
Sought vote designation under § 1126 against certain foreign FTX shareholders without notice.
Shared its proposed plan of reorganzation publicly before approval of the disclosure statement.
Offered to pay certain of its critical vendors more than what was explicitly provided in the plan in exchange for votes in favor of the plan.
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