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Cramdown
The term crawdown refers to the process by which a Plan of Reorganization is confirmed by the Bankruptcy Court over the objections of one or more classes of creditors. The debtor's Plan of Reorganization can be forced on unwilling creditors by the Bankruptcy Court under certain circumstances. For an unsecured creditor, cramdown may mean that unsecured creditors are likely to receive little or nothing under the Plan of Reorganization. For a secured creditor, cramdown may mean that the repayment schedule may be delayed, the interest rate may be reduced, or the collateral may be changed.
The assistance of bankruptcy counsel is essential in a cramdown situation.
Source: "Manual of Credit and Commercial Laws," edited by Charles M. Tatelbaum and John K. Pearson, available at the NACM Bookstore.