Bankruptcy And Reorganization: Lenders

May 11,1999

In a case in which Mayer, Brown & Platt represented the prevailing lender, the Supreme Court of the United States, on May 3, 1999, ruled that a Chapter 11 plan of reorganization for an insolvent partnership that granted, over the objections of a dissenting class of unsecured creditors, its pre-bankruptcy partners the exclusive right to acquire the equity in the reorganized entity through the contribution of "new value" violated the Bankruptcy Code's absolute priority rule and, consequently, should not have been confirmed. Bank of America National Trust and Savings Association v. 203 North LaSalle Street Partnership, No. 97-1418, ___ U.S. ___, 67 U.S.L.W. 4275 (May 3, 1999).