Question of the day
2026-07-02
What is a cramdown?
Answer it out loud first — like you would in the room. Then check yourself:
Reveal the model answer
Model answer
A cramdown is confirmation of a Chapter 11 plan over the objection of a dissenting impaired class. The court can confirm a plan that a class rejects if at least one impaired class accepts (excluding insiders) and the plan is 'fair and equitable' and does not 'unfairly discriminate.' For a dissenting class, 'fair and equitable' means the absolute priority rule is satisfied: the dissenting class is paid in full before any junior class receives value, or no junior class receives anything. Cramdown is the debtor's leverage against holdout creditors.
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