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28 Am. Bankr. Inst. L. Rev. 1 (2020)

handle is hein.journals/abilr28 and id is 1 raw text is: 









     BEAUTY IS IN THE EYE OF THE BONDHOLDER: A BUNDLE OF
   RIGHTS THEORY OF ENFORCEABILITY OF CHAPTER 11 VOTING
                                 ASSIGNMENTS

                               CAMERON SCHLAGEL*
                                         &
                                 CRAIG  AVERCH**

                               TABLE   OF CONTENTS

In tro d u ctio n .................................................................................................................2
I. The Bankruptcy  Code.............................................................................................3
   A. Overview  ...........................................................................................................3
II. A ssignm ent of V oting R ights.................................................................................8
   A. Bankruptcy  Law  and Policy and the Enforcement   of Any Indenture
      Term  Requiring the Transfer or Assignment  of Subordinated
      Creditors' Voting Rights to Senior Creditors ..................................................10
      1. The Expansive Theory  of Enforcement  of section 510(a) ...........................10
      2. The Non-Enforcement   Theory  .....................................................................11
   B. The Bundle  of Rights Theory  of Chapter 11 Voting Assignments   ..............16
      1. The Allowed  Claim: Defining A  Creditor's Rights in Bankruptcy..............17
      2. A Creditor's Allowed Claim is a Bundle of Rights and the Right
        to Vote on the Plan is but One Stick in the Creditor's Bundle .....................22
      3. Enforcement of Voting Assignment   Provisions Neither Precludes
        the Junior Creditor from Participating in the Administration of the
        Bankruptcy  Estate, Nor Does  It Leave the Junior Creditor Without
        Remedies  to Protect Its Interest ...................................................................31
Conclusion  ................................................................................................................38









  * Cameron Schlagel served as a law clerk to the Honorable Ernest M. Robles, Bankruptcy Judge for the
United States Bankruptcy Court Central District of California. Cameron received his J.D. in 2017 from
Loyola Law School Los Angeles where he served as Editor-in-Chief of the Loyola Los Angeles International
& Comparative Law Review, Volumes 39 & 40.
  ** Craig Averch is a Partner within the Los Angeles Office of White & Case, where he heads up the
Financial Restructuring and Insolvency Practice. Craig has extensive experience, gained through many
years' involvement in a variety of proceedings throughout the United States and Central and Eastern
Europe. He counsels clients across a wide range of industry sectors including transportation, real estate,
retail, textile, oil and gas, energy, banking and financial services, healthcare, manufacturing, high-tech
and telecommunications. Craig has been active in academic circles for a number of years, and is
currently enjoying his second spell as Adjunct Professor at the Pepperdine University School of Law.
He has also previously been Adjunct Professor at the Southern Methodist University's Dedman School
of Law.


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