Although the recent decision of the United States Court of Appeals for the Second Circuit in In re DBSD North America, Inc. struck a major blow to "gifting" plans in chapter 11, perhaps the more notable aspect of the Court's decision is its affirmance of the Bankruptcy Court’s designation of plan votes of a party who had purchased claims with the intent of acquiring control over a strategic asset of the debtors. The Court's holding is significant to strategic acquirers of distressed debt and should be considered in evaluating the risks associated with any distressed debt investment.
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