Harvard Law School Bankruptcy Roundtable

The Bankruptcy Roundtable

Promoting the dissemination of academic and practitioner views of current bankruptcy issues

Proper Corporate Governance Necessary to Avoid Recharacterization and Equitable Subordination
by Editor
November 10, 2026
By Chad J. Husnick, Kaitlan Donahue, and Travis Schneider (Kirkland & Ellis) On August 14, 2026, the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) issued a written opinion recharacterizing an intercompany loan from a parent to an indirect subsidiary as an equity contribution and, in the alternative, equitably subordinating the intercompany loan to the claims of… Read more: Proper Corporate Governance Necessary to Avoid Recharacterization and Equitable Subordination

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