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Cramdown The Bankruptcy Code does not define the term "cramdown." The term is shorthand for the process by which a reorganization plan under Chapter 11, 12, or 13 is confirmed over the objections of creditors. A plan can be forced upon unwilling creditors by the bankruptcy court in certain limited circumstances. For an unsecured creditor, cramdown may mean that the creditor will receive little or nothing under the plan. 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. |
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