HHR Bankruptcy Report

Category Archives: Section 510(b)

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Bankruptcy Court Decision Illustrates Limits of Section 510(b) Subordination of Claims

Posted in Claims Subordination, Section 510(b)
A recent decision in the Bankruptcy Court for the District of Delaware explored the limits of mandatory subordination under section 510(b) of the Bankruptcy Code. In In re FAH Liquidating Corp., No. 13-13087(KG), 2017 WL 95115 (Bankr. D. Del. Jan. 10, 2017), Judge Kevin Gross ruled that membership units in special purpose vehicles that held… Continue Reading

Second Circuit Provides Guidance on Subordination of Claims Under Section 510(b)

Posted in Claims Subordination, Second Circuit, Section 510(b)
In a recent opinion providing guidance to bankruptcy courts on a developing issue of law, the Second Circuit affirmed a decision of the District Court for the Southern District of New York subordinating contribution claims pursuant to section 510(b) of the Bankruptcy Code because they arose from the purchase or sale of a security of… Continue Reading

Bankruptcy Court in SDNY Decides Question of Section 510(b) Subordination of Claims Arising from Securities of an Affiliate of the Debtor

Posted in Claims Subordination, Section 510(b)
Mandatory subordination pursuant to section 510(b) of the Bankruptcy Code is commonly applied where claims arise from the purchase or sale of securities that were issued by the debtor.  Less common is the situation where a debtor seeks subordination of claims that arise from a transaction involving securities of an affiliate of the debtor.  This… Continue Reading