White Paper

Recharacterization of Debt as Equity - It’s Substance Of Transaction That Matters

 
“When should debt be recharacterized as equity? The answer to this question will have an enormous impact upon expected recovery in bankruptcy since equity does not begin to get paid until all prior classes of claims are paid in full. In a recent unpublished opinion, the Fourth Circuit Court of Appeals provided some guidance on when and in what circumstances recharacterization is appropriate. The Court’s decision also serves as warning to purchasers of debt that they may not be able to hide behind the original debt transaction in a recharacterization fight.

In PEM Entities, LLC v. Province Grand Old Liberty, LLC (No. 15-1669), the Debtor Province Grande Old Liberty, LLC (the “Debtor”) borrowed approximately $6.5 million from a bank (the “Loan”). The Debtor subsequently defaulted on the Loan and the lender instituted foreclosure proceedings. In order to settle the foreclosure action, the Debtor, its principal and other related entities entered into a settlement agreement with the lender.”

Download this white paper to continue reading …

Mark Salzberg is a partner in the Washington DC office of Squire Patton Boggs (US) LLP. Mr. Salzberg is a member of the firm’s Restructuring & Insolvency practice group. He focuses his practice on bankruptcy litigation, creditors’ rights, debtor reorganizations and complex commercial litigation.

Faculty

Mark A. Salzberg

Squire Patton Boggs

Agenda

Faculty

Mark A. Salzberg

Squire Patton Boggs

Mark Salzberg is a partner in the Washington DC office and a member of the firm’s Restructuring & Insolvency practice group. He focuses his practice on bankruptcy litigation, creditors’ rights, debtor reorganizations and complex commercial litigation. Mark has extensive experience representing debtors, creditors’ committees, financial institutions, secured and unsecured creditors, franchisors and distributors in bankruptcy matters throughout the United States.

All of your training, right here at Lorman.

Pay once and get a full year of unlimited training in any format, any time!

  • Live Webinars
  • OnDemand Webinars
  • MP3 Downloads
  • Course Manuals
  • Audio Recordings*
  • Executive Reports
  • White Papers and Articles
  • Sponsored Live Webinars

Additional benefits include:

  • State Specific Credit Tracker
  • Members Only Newsletter
  • All-Access Pass Course Concierge

* For audio recordings you only pay shipping

Questions? Call 877-296-2169 to speak with a real person.

Sign Up Today

Access to all training products $699/year

Unlimited Lorman Training

With the All-Access Pass there is no guessing what you will need for your yearly training budget. $699 will cover all of your training needs for an entire year!

Easy Registrations

Once you purchase your All-Access Pass you will never be any further than one-click away from attending any Lorman training course.

Invest in Yourself

You haven't gotten to where you are professionally by luck alone; it's taken a lot of hard work and training. Invest in yourself with the All-Access Pass.