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Decoding Chapter 12 Bankruptcy: Navigating the 20-Year Treasury Bond Rate vs. National Prime Rate Dilemma in Determining Discount Rates on Secured Creditor Claims

ABI

In a Chapter 12 bankruptcy, the debtor generally proposes a plan for repaying creditors from future earnings. [1] 6] This ensures complete repayment, covering both the principal loan amount and accrued interest, in accordance with the United States Code. [7] The interest rate may be the subject of dispute.

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SURVIVING FINANCIAL DISTRESS FROM COVID-19 IN THE RESTAURANT, BAR, AND SERVICE INDUSTRY

BN Lawyers

Although minimum payments may result in accrued interest, that is better than a lockout or eviction. If so, the company may qualify as a small business debtor under the Small Business Reorganization Act of 2019 (the “ SBA ”). No Priority: Distributions to Equity. Companies should not be making any distributions to equity.