Finding the Exit: Navigating Administratively Insolvent Ch. 11 Cases

Kelley Drye Special Counsel Scott Cargill co-authored the article, ​“Finding the Exit: Navigating Administratively Insolvent Ch. 11 Cases,” which was published in the American Bankruptcy Institute Journal.

The article examines the growing trend of debtors filing Chapter 11 cases without sufficient funds to pay administrative claims. The piece explores how recent bankruptcy court decisions—including Steward Health Care, Party City, and Rite Aid—are testing the limits of what constitutes creditor ​“consent” to reduced recoveries under §1129(a)(9)(A) of the Bankruptcy Code. Scott and co-author Bruce Nathan discuss how these rulings are reshaping expectations for administrative claimants and influencing strategies in today’s increasingly cash-strapped Chapter 11 landscape.

Read the full article here.