Morgan Lewis on Restructuring, June 2005

In this Issue:

• Bankruptcy Act of 2005: Impact on Large Chapter 11 Cases:
  On April 20, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (the “Act”) of 2005 was signed by President Bush. Most provisions will take effect with respect to cases filed more than 180 days after enactment. Although the provisions of the Act relating to cases filed by individuals have attracted the most attention, the Act also contains significant changes to Bankruptcy Code provisions relevant in Chapter 11 cases.
• Deepening Insolvency: A Lender Liability Theory of Ephemeral Viability?:
  A main concern of any lender is the collectability of its debt in the advent of its borrower’s bankruptcy or liquidation. If a financially troubled borrower files for bankruptcy, a secured lender typically could take comfort in knowing that, as long as its interests were properly and fully secured and perfected, some or all of its loan will be repaid through the sale, liquidation or other disposition of the collateral.
• SPM: Split Decisions:
  On February 23, 2005, the Delaware District Court dealt a blow to the “SPM” type of reorganization plan that is being utilized with increasing frequency.
• Recent Noteworthy Decisions

For the full story, please view the PDF.