The trustee can undo preferential transfers, so the debtor loses the imagined benefit from making the payment.
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Debtor-in-Possession
The § 1111(b) Election In Chapter 11 Bankruptcy
By Nicholas Gebelt on
I recently had an email exchange with a fellow bankruptcy attorney who was a little confused about something called the § 1111(b) election in a Chapter 11 bankruptcy. Her confusion was easy to understand because there are some interesting wrinkles in the statutory language that are worth exploring.
Before we get into the somewhat arcane aspects of today’s topic, it might be worth defining a few important terms that we’ll be using, and then summarizing the salient features of Chapter 11 bankruptcy.
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