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90-minute live streaming program
  • May 10
  • 1:00 - 2:30 pm EST

Bankruptcy Section 1111(b)(2) Elections and Cramdown Interest Rate Strategies

May 10

Understand when, how, and why secured creditor clients can (or cannot) elect treatment under Section 1111(b)(2).

Since becoming effective in February 2020, Subchapter V of Chapter 11 has eliminated certain strategies that secured creditors often utilize to challenge plans of reorganization and to seek larger recoveries. One strategy that remains in place in all Chapter 11 cases, however, is to elect treatment of an undersecured claim under Section 1111(b)(2) of the Bankruptcy Code. Many commercial bankruptcy practitioners do not fully comprehend how electing treatment under Section 1111(b)(2) can enhance their secured creditor clients’ rights and recoveries or how debtors can respond if or when secured creditors make that election. Practitioners also may not fully understand what evidence and methodology they and their witnesses should – or should not -- advance in order to establish a favorable discount (interest) rate that a debtor must pay on allowed secured claims, and how valuation of collateral and the applicable interest rate can affect the feasibility of a contested chapter 11 plan. This presentation will help bankruptcy professionals to understand when, how, and why their secured creditor clients can (or cannot) elect treatment under Section 1111(b)(2), what impact doing so may have on a chapter 11 plan’s feasibility and a secured creditor’s recovery, and how debtors may respond tactically to any such election. Where a debtor seeks to “cram-down” court approval of a chapter 11 plan over dissenting creditors’ opposition, this live webinar also explains the methodology and evidence that the debtor or its secured creditors should use to establish an appropriate discount (interest) rate for repayment of allowed secured claims.

Learning Objectives

  • You will be able to describe how allowed undersecured claims must be treated under a Chapter 11 plan, depending upon whether a class of undersecured creditors does - or does not - elect treatment under Section 1111(b)(2).
  • You will be able to discuss the benefits and risks that electing treatment under Section 1111(b)(2) can have on a secured creditor in connection with a Chapter 11 plan.
  • You will be able to explain when and how a secured creditor should elect treatment of its claim under Section 1111(b)(2).
  • You will be able to identify impacts of the discount rate decision on total recovery and plan feasibility.

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Cram-Down: Interplay Between Sections 506(a) and 1129(b)(2)
  • Oversecured Claims as Compared to Undersecured Claims
  • Bifurcation of Undersecured Claims Under Section 506(a) – Secured and Unsecured Components
  • Treatment of Secured Claims in a Plan Under Section 1129(b)(2)(A)
  • Treatment of Unsecured Claims in a Plan Under Section 1129(b)(2)(B)
  • Collateral Valuation Issues and Impact on Plan Feasibility
Impact of Electing Treatment Under Section 1111(b)(2)
  • No Bifurcation of Undersecured Claims Notwithstanding Section 506(a) – Entire Claim Is Treated as Being Secured (Section 1111(b)(2))
  • Treatment of Underecured Claims in a Plan Following Election Under Section 1111(b)(2)
  • Risks of Electing Treatment Under Section 1111(b)(2)
Reasons to Elect Treatment as a Fully-Secured Creditor Under Section 1111(b)(2)
Method, Timing, and Exceptions to Elect Treatment Under Section 1111(b)(2)
Interest Rate Issues
  • Present Value (Discount Rate) Required by Section 1129(b)(2)(A) for Deferred Cash Payments on Allowed Secured Claims
  • Supreme Court's Till Decision – Applicability in Chapter 11 Cases and How It Has Been Applied
  • Whether an Efficient Market Exists to Establish the Appropriate Discount Rate, and Strategies If One Does Not Exist
  • Evidentiary and Proof Issues to Consider When Seeking to Establish an Appropriate Discount Rate
  • Impacts of the Discount Rate Decision on Total Recovery and Plan Feasibility
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

Live Webinar Registration

  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • Arizona CLE 1.5
     
  • The State Bar of Arizona does not approve or accredit CLE activities for the Mandatory Continuing Legal Education requirement. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • HI CLE 1.5
     
  • This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • ME CLE 1.5
     
  • This course has been approved by the State of Maine Board of Overseers of the Bar. Lawyers who complete this course shall receive 1.5 hours of CLE credit under M. Bar R. 12.
     
  • NH MCLE 1.5
     
  • NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 90 Minutes.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • VT CLE 1.5
     
  • This program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hours of CLE credit.
     
  • WI CLE 1.5
     
  • This program has been approved by the Board of Bar Examiners for 1.5 hours for use toward the Wisconsin Mandatory CLE requirement.
     
  • WV MCLE 1.8
     
  • This program has been approved by the West Virginia State Bar MCLE Commission for 1.8 MCLE hours.
     
  • CPE 1.8 including Business Law 1.8
     
  • Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: https://www.nasbaregistry.org/cpas/complaints. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 1.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Business Law for 1.8 hours. Prerequisite: basic knowledge of the banking industry. Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: Group Internet Based. Please refer to the information in this brochure for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board. Please note: In order to receive CPE credit for this course you MUST use the streaming audio option, as well as enable and complete the required progress checks.
     

Who should attend?

This live webinar is designed for presidents, vice presidents, branch managers, loan officers, credit and collections managers, loan department personnel, compliance officers, accountants, and risk managers.

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Kirk B. Burkley, Esq.

Kirk B. Burkley, Esq.

Bernstein-Burkley, P.C.

  • Managing Partner at Bernstein-Burkley, P.C.
  • Practice emphasizes all aspects of bankruptcy & restructuring, creditors’ rights, business & corporate transactions, litigation, real estate, and oil & gas
  • Conducts regular seminars/live webinars and workshops on bankruptcy, creditors’ rights, and oil and gas
  • Chairman of the American Board of Certification (2020), past President of the American Board of Certification and Turnaround Management Association, and member of Allegheny County Bar Association and the American Bankruptcy Institute
  • In 2020, recognized as the only bankruptcy and creditors’ rights attorney on Pennsylvania Super Lawyers’ list of Top 50 Pittsburgh attorneys
  • J.D. degree, University of Pittsburgh School of Law; B.S. degree, Ohio University
  • Contact 412-456-8108 or [email protected]
Sarah E. Wenrich, Esq.

Sarah E. Wenrich, Esq.

Bernstein-Burkley, P.C.

  • Bankruptcy & restructuring associate at Bernstein-Burkley, P.C.
  • Practice focuses on commercial bankruptcy
  • Served as an extern for the Honorable Kevin R. Huennekens of the United States Bankruptcy Court for the Eastern District of Virginia, where she gained significant exposure to complex bankruptcy cases and issues, and had the opportunity to assist in drafting and editing opinions
  • J.D. degree, cum laude, University of Richmond; B.A. degree, cum laude, University of Pittsburgh
  • Contact 412-456-8106 or [email protected]
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 407019
Published 2021
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