Tue, Jan 26, 2016

Taking a Deeper Look into Momentive-Michael Vitti Published on Harvard Law School's Bankruptcy Roundtable

Much has been written about Momentive. Nevertheless, some relevant questions are not often addressed, if at all. I recently attempted to answer some of these questions in a recently published article:

How much economic value was taken from the secured creditors if one believes they should have received the market rate of interest?

The answer (almost $200 million) may be higher than some would have expected. This higher than expected number occurs because the cramdown interest rate decreased, while the market interest rate increased, between August 26, 2014 (the date analyzed in the bankruptcy court’s opinion) and October 24, 2014 (the date the debtor emerged from bankruptcy).

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