COMPLETE ANATOMY USC FULL

There are several threshold requirements for a secured creditor to be eligible to make the § 1111(b) election, most of which are set forth in the statute itself. Understanding the requirements, effects, and limitations of § 1111(b) is key to using it strategically to maximize the recovery for an undersecured creditor. However, it may not always be the best course of action. Bankruptcy Code, can be a boon to an undersecured creditor in some circumstances. This election, found in § 1111(b) of the U.S.

That is, the secured creditor can elect to have the entire amount of its allowed claim treated as secured, even if the amount of the claim far exceeds the value of the collateral. However, in chapter 11 cases, a secured creditor has the option of avoiding the bifurcation of its claim entirely. Coupled with the likelihood of receiving little to nothing on the unsecured portion of its claim, these secured creditors are left with a bitter pill to swallow. Because the value of a secured creditor’s collateral may fluctuate in response to market conditions-say, for example, a systemic housing market crash or a pandemic-induced recession-it can be left with an artificially low secured claim in some cases. Secured claims are typically paid in full, while creditors often receive little or nothing on unsecured claims. Undersecured claims are bifurcated into two separate claims: a secured claim for the value of the collateral, and an unsecured claim for the remainder of the creditor’s claim. This frequently arises when the creditor’s collateral is worth less than the amount of its claim, an “undersecured claim” in bankruptcy parlance.

COMPLETE ANATOMY USC FULL

Secured creditors in bankruptcy often face the prospect of recovering less than the full value of their claims against the debtor.

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Recent Developments in Business and Corporate Litigation.

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Complete anatomy usc