Replies to post #1651 on Lehman Brothers Financial SA (LEHNQ)

[linda1]

On the negative side I have read that Judges prefer Substantive Consolidation as a last resort.


On the positive side I have read that the larger and more complex a Chapter 11 bankruptcy is - the higher the occurrence of Substantive Consolidation.


Here is an excerpt from just one article I read on Substantive Consolidation and if you will please note that the writer states Substantive Consolidation occurred in 8 of the top 10 - largest Chapter 11 bankruptcies - between 2000 - 2004.



Pages 252 - 253


"Substantive consolidation appears frequently in negotiated plans
for our largest Chapter 11 reorganizations. My preliminary empirical
study of the twenty-one largest corporate bankruptcy filings from 2000
to 2004, ranked by asset size, reveals that substantive consolidation
was imposed, proposed, or settled in eleven of those cases. Eight of
the top ten bankruptcies constituted “Substantive Consolidation
Bankruptcies,” as defined in the study."



http://docs.law.gwu.edu/stdg/gwlr/issues/pdf/Widen.pdf