Corinne Ball, with Jones Day. Courtesy photo The Calculus of Default, Cure and Reinstatement of a Loan in Chapter 11 Gains Clarity in New York
Distress investors ought to take heed from the analysis set forth in 'In re Golden Seahorse.' The Bankruptcy Court for the United States Southern District of New York confronted a legacy of divergent cases, arguments among commentators and a somewhat ambiguous legislative history on the issue of cure requirements for reinstatement of a loan with favorable terms to its prepetition status
October 25, 2023 at 11:18 AM
14 minute read
Distress investors ought to take heed from the analysis set forth in In re Golden Seahorse, 652 B.R. 593, 595 (Bankr. S.D.N.Y. 2023). The Bankruptcy Court for the United States Southern District of New York confronted a legacy of divergent cases, arguments among commentators and a somewhat ambiguous legislative history on the issue of cure requirements for reinstatement of a loan with favorable terms to its prepetition status. If reinstatement is accomplished the lender is unimpaired, does not vote on a Chapter 11 plan and the loan remains outstanding despite its acceleration upon the filing of bankruptcy.
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