Law Commons^™

The Outer Fringes Of Chapter 11: Nonconsenting Senior Lenders' Rights Under Subordination Agreements In Bankruptcy, David Kravitz

Michigan Law Review

This Note focuses on the options a senior creditor in Frugal's position may have when a reorganization plan provides for payments in violation of a subordination agreement that the creditor wishes to enforce. Part I explains the different types of subordination agreements and discusses their treatment under pre-Code bankruptcy law and under the Bankruptcy Code. Because of the dearth of case law regarding nonconsenting senior lenders and subordination agreements, Part II considers a question in a related area of bankruptcy law where more authority exists: whether a reorganization plan may release a nonbankrupt guarantor from its obligations under the guaranty …