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ABI/Illinois Symposium -- Now on Video!

posted by Bob Lawless

The American Bankruptcy Institute (ABI) Commission on Chapter 11 Reform has been considering how to improve the chapter 11 process. Among the thorniest issues the ABI Commission has faced is how to fairly balance the interests of secured creditors with the rights of other stakeholders in the chapter 11 process. To better understand the issues and especially to illuminate whether secured creditors can assert constitutional limits on chapter 11 reform, the ABI and the University of Illinois College of Law co-sponsored a symposium in early April at the offices of Kirkland & Ellis. 

The presentations now are all available for streamning over the Internet at the low, low price of free. The papers will be published in the University of Illinois Law Review.

Quite a number of the presentations discussed the mismatch between the claims of blanket lienholders and what Article 9 and the Bankruptcy Code recognize as postpetition collateral. The general rule is that prepetition lienholders get "'proceeds" of prepetition collateral but "non-proceeds" that come into the bankruptcy estate are free of prepetition liens.  At the least, there are more gray areas than lienholders acknowledge. Often, the law already limits prepetition liens in ways that are being ignored.

Do prepetition lienholders have claims against intellectual property that is developed postpetition? What about new revenue sources generated by employee efforts? Lienholders often say "yes," but many of the presentations challenge this increasingly conventional wisdom.


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