GLOSSARY

• Jurisdiction: United States

Absolute Priority Rule

Codified in § 1129(b) of the Bankruptcy Code, it is the term commonly referred to as governing the priority of distribution of assets from the Debtor's estate. In general, the Absolute Priority Rule provides that if a class of unsecured creditors rejects a plan and is not paid in full, junior creditors and equityholders may not receive or retain any property under the plan.

Assumption

The Debtor's agreement to assume and continue to perform under an executory contract or unexpired lease, which typically requires the Debtor to cure any existing pre- and post-petition defaults under the contract or lease.

Automatic Stay

An automatic injunction, found in § 362 of the Bankruptcy Code, against creditors' collection efforts that takes effect upon the filing of a Debtor's petition, with some limited exceptions.

Automatic Stay Litigation

A dispute between a creditor and the Debtor on whether the Automatic Stay applies to a creditor's collection efforts that requires the creditor to take part in the Debtor's bankruptcy case or seek relief from the Automatic Stay prior to continuing its collection efforts.

Bankruptcy Code

Title 11 of the U.S. Code, as amended from time to time.

Bankruptcy Court

The federal court with jurisdiction over bankruptcy cases after they are referred from the District Court.

Bankruptcy Rules

The Federal Rules of Bankruptcy Procedure, which govern practice and procedure in a bankruptcy case.

Cash Collateral

As defined in § 363(a) of the Bankruptcy Code, the Debtor's "cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents." Typically includes the proceeds of Cash Collateral, which would include cash realized from the liquidation of such collateral.

Chapter 5

The Bankruptcy Code chapter governing creditors' claims, the Debtor's duties and the estate. Mainly referred to in the context of Chapter 5 Causes of Action, which include claims for preferential and fraudulent transfers.

Chapter 7

The Bankruptcy Code chapter applicable to the liquidation of a nonoperating company, although a Chapter 7 Trustee can operate a Debtor in very limited circumstances.

Chapter 11

The Bankruptcy Code chapter applicable to reorganizations (and in certain jurisdictions, liquidations) of Debtors in Possession.

Chapter 11 Case

A bankruptcy case proceeding under Chapter 11.

Chief Restructuring Officer (CRO)

An officer-level executive hired by a company to aid in the restructuring of the company's...