Fifth Circuit Upholds “Absurd” Cramdown Interest Rate

The U.S. Court of Appeals for the Fifth Circuit recently held that a bankruptcy court had not erred in applying a prime plus 1.75 percent interest rate to a secured lender’s $39 million claim under a “cramdown” plan of reorganization. In this article, SRZ partner Lawrence V. Gelber and associate Neil S. Begley discusses the decision and its implications.