Pandemic Hope for Chapter 11 Financing

Skeel, David A.

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Pandemic Hope for Chapter 11 Financing

Yale Law Journal Forum, Vol. 131, p. 315, 2021

U of Penn, Inst for Law & Econ Research Paper No. 21-30

23 Pages Posted: 14 Nov 2021

See all articles by David A. Skeel

David A. Skeel

University of Pennsylvania Carey Law School; European Corporate Governance Institute (ECGI)

Date Written: November 10, 2021

Abstract

The pandemic revealed that the increasing complexity of debtor’s capital structure could supply much-needed competition in the Chapter 11 financing market, as other inside lenders increasingly challenge a debtor’s favored inside lenders. After discussing the benefits of this surprising development, the Essay identifies several impediments and offers strategies for removing them.

Keywords: Bankruptcy, reorganization, Chapter 11, debtor-in-possession financing, DIP, COVID-19 pandemic, economic shutdown, restructuring support agreements, RSAs, fragmented capital structure, first, second & priming liens, Neiman Marcus

JEL Classification: D25, G32, G33, G38, K22

Suggested Citation: Suggested Citation

Skeel, David A., Pandemic Hope for Chapter 11 Financing (November 10, 2021). Yale Law Journal Forum, Vol. 131, p. 315, 2021, U of Penn, Inst for Law & Econ Research Paper No. 21-30, Available at SSRN: https://ssrn.com/abstract=3961523