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Second Circuit Bars “Gifting” Plans and Upholds Designation of Competitor’s Votes as “Not In Good Faith”

February 9, 2011

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In a February 7, 2011 decision, DISH Network Corp. v. DBSD North America, Inc., Sprint Nextel Corp. v. DBSD North America, Inc., the Second Circuit Court of Appeals held that "gifting" plans violate the absolute priority rule and that a competitor's vote was appropriately designated for being "not in good faith" when its motive was to attempt to obtain a blocking position and control the bankruptcy.

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