From the perspective of bankruptcy law, this issue is actually quite clear: you cannot forcibly impose billions of dollars in senior debt on a financially stable entity with positive cash flow and then turn around to fill the gaps for other creditors—relying solely on so-called "business judgment" is untenable. Unless it can be proven that this debt is necessary or genuinely beneficial to the debtor itself, it violates the explicit provisions of Sections 364 and 6003 of the U.S. Bankruptcy Code. This is the clear legal bottom line.
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
From the perspective of bankruptcy law, this issue is actually quite clear: you cannot forcibly impose billions of dollars in senior debt on a financially stable entity with positive cash flow and then turn around to fill the gaps for other creditors—relying solely on so-called "business judgment" is untenable. Unless it can be proven that this debt is necessary or genuinely beneficial to the debtor itself, it violates the explicit provisions of Sections 364 and 6003 of the U.S. Bankruptcy Code. This is the clear legal bottom line.