BUSINESS RESTRUCTURING REVIEW
VOL. 21 • NO. 2
MARCH–APRIL
2022
1
IN THIS ISSUE
1 Message from the
Business Restructuring &
Reorganization Practice
Leader
2 Lawyer Spotlight: Heather
Lennox
2 Modification of Secured
Loan under Cram-Down
Chapter 11 Plan Warranted
Due to Plan Feasibility
Threat
5 Hertz Bankruptcy Court
Weighs In on Make-Whole
Premiums, Solvent-Debtor
Exception, and Pendency
Interest
12 Confirmation Denied:
Chapter 11 Plan Did
Not Satisfy New Value
Exception to Absolute
Priority Rule Without Market
Testing
17 Cross-Border Bankruptcy
Update: Bad Faith Not a
Basis for Denying Chapter
15 Recognition
21 U.S. Supreme Court
Bankruptcy Roundup
26 Newsworthy
MESSAGE FROM THE BUSINESS RESTRUCTURING & REORGANIZATION
PRACTICE LEADER
In the 20 years since Jones Day launched the Business Restructuring Review as a plat-
form for keeping clients and friends informed of significant developments in business
bankruptcy, restructuring, and related areas, the world has faced a series of challenges
that have profoundly changed the way that we look at almost everything. Bankruptcy and
restructuring is no exception.
The bankruptcy and restructuring landscape has shifted during the last two decades in
ways that might have been difficult to imagine at the turn of the millennium. The rise of pri-
vate capital and the market shift to privately held companies has fundamentally changed
the tenor of restructurings. Out-of-court restructurings have largely supplanted “free fall”
chapter 11 cases, and chapter 11 itself now usually features asset sales and pre-packaged
or pre-negotiated bankruptcies by which companies can sometimes obtain confirmation of
comprehensive restructuring plans in mere days rather than months or years. Restructuring
has more frequently become a global phenomenon, with an explosion of cross-border
cases and enactment of laws in many countries designed to harmonize and coordinate
cross-border proceedings.
These developments demand creative solutions, and we at Jones Day are at the forefront
in innovating to address and anticipate the needs of our clients. Finally, although much has
changed in bankruptcy and restructuring in recent years, our dedication to providing our
clients and friends with incisive, informative, and timely analysis of ongoing developments
has not. We look forward to our next 20 years of interaction with you.
— Heather Lennox
2002 2022
EDITION
2
LAWYER SPOTLIGHT: HEATHER LENNOX
Heather Lennox, a partner in the Cleveland and New York offices,
serves as Global Practice Leader of the Firm’s Business Restructuring &
Reorganization (“BRR”) Practice, effective January 2022.
Heather has been a partner in the Firm’s BRR Practice since 2002 and has
led some of the most important restructuring cases in the United States
over the past two decades, including work on behalf of the City of Detroit,
Peabody Energy, Hostess Brands, and FTD. She is a member of the
National Bankruptcy Conference, which advises Congress on national bankruptcy policy, and a Fellow in the American
College of Bankruptcy. She served as Partner-in-Charge of the Firm’s Cleveland Office from 2016 to 2022.
Heather has been named a “Dealmaker of the Year” by The American Lawyer and is recognized as one of the nation’s
leading lawyers by legal directories; she also has earned top rankings for many years running in Chambers, Best
Lawyers in America, IFLR1000, and Lawdragon 500 Leading Global Restructuring & Insolvency Lawyers. In 2020,
Heather was named to Cleveland Magazine’s “Cleveland 500” list.
“Heather joined Jones Day as an associate in Cleveland in 1992 and has spent her entire exceptionally successful legal
career as a member of our Firm,” says Kevyn Orr, Partner-in-Charge of the U.S. Region. “Through her leadership on
numerous high-profile restructurings, she has become nationally recognized for her excellence as a bankruptcy lawyer.
She is rooted in Jones Day’s culture, has been a great leader of the Firm’s Cleveland Office as its Partner-in-Charge
and in other roles, and will be an excellent Practice Leader.”
Heather succeeds Bruce Bennett, who has led Jones Day’s BRR Practice since 2016, and will continue to advise clients
as a partner in the practice.
MODIFICATION OF SECURED LOAN UNDER CRAM-
DOWN CHAPTER 11 PLAN WARRANTED DUE TO
PLAN FEASIBILITY THREAT
Brad B. Erens • Mark G. Douglas
Many recent court rulings concerning the treatment of secured
creditors under a chapter 11 plan have focused on “cram-up”
plans involving reinstatement of secured loans to avoid impair-
ment (and the ability to vote on the plan) or “cram-down” confir-
mation involving either the sale of the lender’s collateral, subject
to the lender’s right to “credit bid” its claim, and attachment of its
lien to the proceeds, or treating the secured claim in a way that
provides the lender with the “indubitable equivalent” of its claim.
A ruling recently handed down by the U.S. Bankruptcy Court for
the District of New Jersey explores another avenue to confirma-
tion of a plan over the objection of a secured creditor. In In re
Ocean View Motel, LLC, 2022 WL 243213 (Bankr. D.N.J. Jan. 25,
2022), the court ruled that a plan could be confirmed over a
secured lender’s objection even though a new secured note
given to the lender eliminated his prepetition contractual right
to file a deed in lieu of foreclosure in the event of the debtor’s
default. According to the court, the terms of the new note, which
was secured by collateral valued significantly greater than the
amount of the debt, more than satisfied the Bankruptcy Code’s
minimum requirements for cram-down confirmation, and if not
eliminated, the deed in lieu of foreclosure provision threatened
the plan’s feasibility and the debtor’s prospects for a successful
reorganization.
IMPAIRMENT OF CLAIMS UNDER A CHAPTER 11 PLAN
Creditor claims and equity interests must be placed into
classes in a chapter 11 plan and treated in accordance with the
Bankruptcy Code’s plan confirmation requirements. Such classes
of claims or interests may be either “impaired” or “unimpaired” by
a chapter 11 plan. The distinction is important because, among
other things, only impaired classes have the ability to vote to
accept or reject a plan. Under section 1126(f) of the Bankruptcy
Code, unimpaired classes of creditors and shareholders are con-
clusively presumed to have accepted a plan. Classes of creditors
