X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
L-R Francis Lawall and John Henry Schanne, Pepper Hamilton. L-R Francis Lawall and John Henry Schanne, Pepper Hamilton.

Equal treatment of claims in the same class within a plan of reorganization is an important creditor protection in Chapter 11. However, is it possible to provide certain benefits to some creditors within a single class and not others without running afoul of the Bankruptcy Code? In a recent ruling on an issue of first impression, the U.S. Court of Appeals for the Eighth Circuit certainly made clear it thought so in Ad Hoc Committee of Non-Consenting Creditors v. Peabody Energy, (In re Peabody Energy), No. 18-1302, 2019 U.S. App. LEXIS 23824 (8th Cir. Aug. 9, 2019). In Peabody, the Eighth Circuit held that a debtors’ Chapter 11 plan complied with Bankruptcy Code Section 1123(a)(4) (which mandates that a plan provide the same treatment to all members of a particular class), despite providing more favorable treatment to creditors that agreed to backstop a rights offering by paying the participating creditors significant premiums and allowing them to purchase preferred stock at a deep discount.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Law Firms Mentioned

 

Pennsylvania Tax HandbookBook

Published by The Legal Intelligencer, and in cooperation with the Pennsylvania Institute of Certified Public Accountants, the Pennsylvania Tax Handbook is a reference too...

Get More Information
 

SuperConference 2020Event

SuperConference is the premier forum for informing, advancing and inspiring today s General Counsel from Fortune 1000 Companies.

Get More Information
 

General Counsel Summit (GCS) 2020Event

General Counsel Summit is the premier event for in-house counsel, hosting esteemed legal minds from all sectors of the economy.

Get More Information
 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.