"Stroock Prevails in Subordination Dispute Over Post-Petition Interest"

Stroock partners Kris Hansen, Ken Pasquale and Erez Gilad, representing the Official Committee of Unsecured Creditors of K-V Discovery Solutions, Inc. in Silver Point Finance, LLC v. Deutsche Bank Trust Co. Americas (No. 13-1381), successfully obtained a ruling (for the benefit of the unsecured creditors, including convertible subordinated noteholders) declaring that K-V's senior noteholders are not entitled to recover post-petition interest from subordinated noteholders.

This Stroock Special Bulletin examines the ruling, and the underlying dispute over entitlement to post-petition interest, which was raised in connection with a plan settlement between the largest holders of the senior and subordinated notes, whereby the Bankruptcy Court would rule on the issue in connection with confirmation of K-V's plan of reorganization.