Creditors at the level where value breaks. Creditors who are only likely to receive a partial repayment of their claims have leverage
over an insolvency
structure because they are often the only class of claims that has a vote that matters. The existence of a fulcrum security
usually means that a senior class of debt
is being paid in full, with the approval by this senior class being automatic. Any interests junior to the fulcrum will get nothing, and so the rejection of the plan by that class of claims is equally presumed.
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