ConvergeOne Minority Lenders Win Bankruptcy Deal Reversal (1)

ConvergeOne Holdings Inc.'s minority lenders convinced a judge to reverse a key part of the cloud computing provider’s bankruptcy plan over their exclusion from a lucrative investment opportunity.

The pre-packaged Chapter 11 plan provided unequal treatment to some lenders within the same creditor class, violating the US bankruptcy code, Judge Andrew Hanen of the US District Court for the Southern District of Texas said in an order Thursday.

The order on appeal is a relatively rare reversal of a confirmed bankruptcy plan order and adds to growing judicial guidance on liability management deals, which have spurred lender-on-lender disputes.

ConvergeOne’s restructuring ...