Shuttered dental alignment brand SmileDirectClub Inc. is barred from pushing down the repayment priority of loans owed to the company’s founders in order to take on litigation funding, a Texas bankruptcy judge ruled.
SmileDirectClub’s court-appointed Chapter 7 trustee is bound by the terms of a bankruptcy loan requiring that the company’s founders be paid back before all others involved in the insolvency proceedings, Judge Christopher Lopez of the US Bankruptcy Court for the Southern District of Texas ruled Friday, siding with the lenders.
The existing loan agreement is binding via court order and can’t be deprioritized to allow trustee ...
Learn more about Bloomberg Law or Log In to keep reading:
Learn About Bloomberg Law
AI-powered legal analytics, workflow tools and premium legal & business news.
Already a subscriber?
Log in to keep reading or access research tools.