Rescue Loans and the Risk of Recharacterization
Author: David M. Hillman.; G. Scott Leonard.
Source: Volume 35, Number 04, April 2019 , pp.55-58(4)
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Abstract:
Recharacterization is a doctrine that allows bankruptcy courts to look behind the label assigned to a particular investment and determine whether it should be treated as debt or equity. The authors discuss the doctrine with a particular focus on rescue loans and then turn to recent cases in which recharacterization was granted or denied.Keywords: “Equitable Power” and “State Law” Theories of Recharacterization; Hartford Holdings LLC v. Mladen; In re Aéropostale Inc.
Affiliations:
1: Schulte Roth & Zabel LLP; 2: Schulte Roth & Zabel LLP.