S&P predicts lender recoveries may fall under Bankruptcy Protection Act of 2005

Angela McDaniels

Seattle, Jan. 19 - Standard & Poor's said the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 incorporates amendments to the Bankruptcy Code that may alter negotiations for many participants involved with corporate bankruptcies.

Even if all of the amendments themselves turn out to be innocuous, lender recoveries may still suffer in the near term due to the litigation costs associated with defining specific amendment language, the agency said.

In a report titled "Bankruptcy Code Amendments May Reduce Lender Recoveries," S&P discusses 10 amendments that could affect either the insolvency process or a claimant's negotiating position sufficiently to impact claimant recoveries.

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