Join CREFC’s Working Group on Reforming the Bankruptcy Code
November 20, 2023
CREFC’s Policy Committee, which comprises the leadership of each CREFC Forum, works to analyze and recommend positions on a variety of federal policy issues impacting the CRE and multifamily finance industry.
Why it matters: The Policy Committee has been working on proactive measures to address issues of concern. As such, the Committee would like to develop and propose amendments to the federal bankruptcy code.
The committee identified eight key issues for discussion. The items are summarized below. These are draft discussion items and do not reflect policy positions.
- Promote mezzanine borrower bankruptcies separate and apart from those of senior secured borrowers.
- Protect secured lenders in a cram-up situation.
- Codify the solvent debtor exception and allow post-petition interest at the contract rate.
- Confirm that early redemption, yield maintenance, prepayment premiums, and make-whole amounts are not unmatured interest, so they could be collectable in bankruptcy.
- Explicitly authorize “roll-ups”, which are generally authorized under caselaw.
- Eliminate needless enforcement delay during foreclosure when certain tenants are in bankruptcy.
- Prevent debtors circumventing isolation requirements.
- Eliminate common debtor techniques used to confirming a cram-down plan.
Contact David McCarthy (email@example.com):
- For a detailed memo on the above items; and/or
To join a working group to vet and propose the changes.