From our private database of 28,500+ case briefs...
Bank of Montreal v. Official Committee of Unsecured Creditors (In re American HomePatient, Inc.)
United States Court of Appeals for the Sixth Circuit
420 F.3d 559 (2005)
American HomePatient, Inc. (American) (debtor) took out loans with a principal amount between $278 and $290 million. Later, American filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. A group of secured lenders that included Bank of Montreal (the lenders) (plaintiffs) raised objections to the proposed reorganization plan, but the bankruptcy court used the Bankruptcy Code’s cramdown provision to force approval. In determining a cramdown interest rate, the court used an approach called the coerced-loan theory, which considered the interest rate that a lender would obtain if it made a new loan to a similarly situated debtor in the same industry, albeit outside of bankruptcy. The court chose an interest rate of 6.785 percent—a figure based on the interest rate of a six-year Treasury note plus 3.5 percent. The lenders, however, considered the appropriate interest rate to be 12.16 percent—a figure that the bankruptcy court rejected as providing the lenders with an unnecessary windfall. The lenders appealed to federal district court, which affirmed the bankruptcy court. The lenders appealed. The United States Court of Appeals for the Sixth Circuit granted certiorari.
Rule of Law
Holding and Reasoning (Gilman, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 545,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 545,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 28,500 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.