An undersecured lender’s best friend in bankruptcy: Section 1111(b)

The 7th Circuit recently expanded the application of Section 1111(b) under the Bankruptcy Code

Distilled to its core, bankruptcy is commonly understood as a “debtor-friendly” tool. As a general rule, creditors do worse in bankruptcy than they otherwise would fare outside of bankruptcy. Such basic realities explain why debtors often threaten their creditors with bankruptcy, and why creditors often seek to get bankruptcy cases dismissed.

But in a case decided late last year, the 7th Circuit Court of Appeals expanded the rights of junior, undersecured lenders.

Contributing Author

author image

William Choslovsky

A Harvard Law School graduate who clerked for two courts, William Choslovsky is a partner at Neal, Gerber & Eisenberg LLP (Chicago), where he focuses...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.