# kaal:claim:1908473-037

**Claim.** Reorganization through contingent capital eliminates the holdout problem, because the majority of contingent capital holders, or those holders together with shareholders, determine governance after conversion, so a lone dissenter cannot collect more than other creditors.

**Type.** mechanism  **Support.** argued

**Holds when.**

- Applies after conversion and before resolution
- The holdout who becomes a shareholder shares losses proportionate to equity ownership

**Source quote.**

> The majority of CCS holders, or CCS holders and shareholders combined, determine corporate governance after conversion and prior to resolution. A sole holdout of consent will therefore not enable any creditor to collect more than any other creditor.

**From.** Wulf A. Kaal, Christoph Henkel, *Contingent Capital with Sequential Triggers* (2011), VI.C. Chameleon Equity, page 57

**Cite as.** Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

**Verify.** sha256 of source PDF `9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Henkel%20-%202011%20-%20Contingent%20Capital%20with%20Sequential%20Triggers.pdf

**Topics.** institutional-design

**Keywords.** holdout-problem, workout-agreements, reorganization, creditor-coordination

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