9th Circ. Says Absolute Priority Applies to All Ch. 11s
Orange County partner Penelope Parmes was quoted in a January 28 Law360 article about the Ninth Circuit affirming that the absolute priority rule still applies to individual Chapter 11 reorganizations after the Bankruptcy Code was amended in 2005. This decision overrules a 2012 ruling from the Ninth Circuit’s Bankruptcy Appellate Panel and affirms a California bankruptcy judge’s order sustaining California Bank & Trust’s objection to a reorganization plan filed by David K. Zachary and Annmarie S. Snorsky that would have paid the bank $5,000 on its nearly $2 million claim. Penelope, an attorney for California Bank & Trust, was quoted as saying “I think it’s a fair reading of the statutes when taken together, and as the court noted in its opinion, the court did not rule on the equity of whether this helps or hurts the debtor but rather what the law says.” Matt Murphey argued the appeal before the Ninth Circuit.
Penelope, along with Matt, Marty Taylor and Meghan Canty Sherrill, were all mentioned in a Bloomberg BNA article about the same matter – Zachary v. Cal. Bank & Tr.