In U.S. bankruptcy law, the concept of super priority gives the status of a claim superior to that of other rights. Ultra-priority requirements (summapriority) take precedence over super-priority requirements. Super-priority requirements can be guaranteed or unsecured. Among the various proposals, the Tribunal should be allowed to give super priority to the financing of rescue operations in the form of agreements. This means that, when a claim has been made, the company concerned can apply to the courts for an injunction on one of the following debt claims attributed to it: many of these restructurings should be followed, as companies and other debtors seek additional financing while existing creditors struggle to maintain their priority interests. Stakeholders in these matters should consult with competent consultants, not only on restructuring, but also on possible disputes between the company and existing covered debtors, who have been excluded from the new structure. While it appears that several provisions relating to “wholesale” credit contracts, such as the flexibility of Dutch auctions in the “open market”, have enabled Serta to proceed with the recapitalization, the judge`s decision fundamentally challenges the notion of the inviolability of the proportional clause on “sacred rights” in many credit contracts. While the notion of creative valuation of restructuring operations is not new, this case highlights the need for lenders to understand the exact nature of their “sacred rights” as part of their government agreements and how they could be circumvented by sponsors, borrowers and creative lenders.

Credit must be continued for the business as a current business. In this context, the Department of Legal Affairs sought comment on whether the applicable standard was that the credit was necessary for this purpose or that it would be sufficient to require that the credit be used to allow the corporation to continue as a current business. In Serta`s case, dissenting lenders held about 30 per cent of Serta`s initial outstanding amount of $2 billion, with accepting lenders holding more than 50.1 per cent of the loan for the first loan; as such, the agreeing lenders were “necessary lenders” under the credit contract. In the dissenting lender`s complaint, it was alleged that all lenders concerned – not just “necessary lenders” – must approve any amendment that “changes or amends the provisions of sections 2.18 (b) or (c) of the credit contract in a manner that, by its terms, would alter the proportional distribution of the resulting payments.” The deviant lender`s main view is that the transaction, by granting a cascading super-priority position, violated the limitation of the agreement amending the proportional allocation provision, without the agreement of any lender concerned being violated.