By Michael Rosenthal, Matthew Bouslog and Dylan Cassidy ( November 1, 2017, 12:39 PM EDT) -- On Oct. 20, 2017, the Second Circuit issued its opinion in Momentive Performance Materials Inc. v. BOKF NA v. Wilmington Savings Fund Society, FSB (In re MPM Silicones LLC), __ F.3d __, 2017 WL 4700314 (2d Cir. Oct. 20, 2017), affirming in part and reversing in part a decision by the U.S. District Court for the Southern District of New York.[1] Notably, the Second Circuit ruled that the bankruptcy court should have considered whether there was an efficient market before using the "formula approach" to calculate the "cramdown" interest rate that secured lenders should receive in a Chapter 11 plan. This Second Circuit ruling, which is consistent with the approach taken by the Sixth Circuit, significantly weakens a Chapter 11 debtor's threat of "cramming down" its secured lenders in a plan of reorganization, thereby increasing secured lenders' leverage in negotiations with distressed borrowers....