The Yale Law Journal

Donald S. Bernstein


Absolute Priority, Valuation Uncertainty, and the Reorganization Bargain

Douglas G. Baird & Donald S. Bernstein

115 Yale L.J. 1930 (2006)

In a Chapter 11 reorganization, senior creditors can insist on being paid in full before anyone junior to them receives anything. In practice, however, departures from "absolute priority" treatment are commonplace. Explaining these deviations has been a central preoccupation…