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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] 1] Under a Chapter 12 plan, secured creditors will generally be paid in full, while unsecured creditors will often receive less than full payment. [2] 7] In Farm Credit Services of America v.

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

BN Lawyers

It will often be beneficial for companies to make at least the minimum payments in order to maintain access to the credit line that can be used to satisfy higher priority creditors if necessary. Although minimum payments may result in accrued interest, that is better than a lockout or eviction.