In a much-anticipated decision, the United States Court of Appeals for the Third Circuit recently held that unsecured noteholders’ claims against a debtor for certain “Applicable Premiums” were the “economic equivalent” to...more
There is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under section 363 of the Bankruptcy Code. A structured dismissal is a...more
Retaining key management at a distressed company in the midst of an out-of-court restructuring can be necessary for the success of the restructuring. To realign incentives, private credit lenders need to consider reloading...more
When leveraged buyouts (“LBOs”) fail, the selling shareholders are litigation targets. A common suit is a claim by a bankruptcy trustee asserting constructive fraudulent transfer claims seeking to claw-back payments to the...more
While global inflation and higher-for-longer interest rates dominated macroeconomic headlines over the last year, middle-market private credit restructurings witnessed three notable trends.
First, these credits remained...more
1/26/2024
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Debt ,
Debt Restructuring ,
Divestiture ,
High-Yield Markets ,
Interest Rates ,
Lenders ,
Middle Market ,
Motion to Dismiss ,
Price Inflation
In our prior alert over the summer, we highlighted the Delaware Supreme Court’s decision in Stream TV Networks, Inc. v. SeeCubic, Inc., 279 A.3d 323, 329 (Del. 2022) (“Stream TV”), which held an insolvent corporation could...more
Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors or asset buyers. The U.S. District Court for the District of Delaware recently reminded bankruptcy participants of an often overlooked...more
Restructurings defy a one-size fits all approach because every deal is unique and different tools are required to solve different problems. At one end of the restructuring continuum is the so-called “amend and extend,” where...more
Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors, or asset buyers. The Delaware District Court recently reminded bankruptcy participants of an often overlooked pitfall involving the...more
12/1/2023
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Collective Bargaining Agreements (CBA) ,
Creditors ,
Debtors ,
Delaware ,
Free and Clear Transactions ,
NLRA ,
NLRB ,
Non-Discrimination Rules ,
Successor Liability ,
Successors ,
Unions ,
United Steelworkers
When debt restructuring discussions are at an impasse and the reservoir of goodwill between the parties has run dry, stakeholders face difficult choices. For a lender, one of the most powerful tools available is the exercise...more
8/4/2023
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Borrowers ,
Debt Restructuring ,
Equity ,
Lenders ,
Notice Requirements ,
Parent Corporation ,
Proxy Voting ,
Shareholders ,
Voting Rights ,
Written Consent
Once again, we reflect on the prior year for restructuring trends impacting private credit lenders. Last year it was all about “liability management”—the latest trend in which the limits of sponsor-favorable loan documents...more
1/18/2023
/ Bankruptcy Court ,
Capital Raising ,
Chapter 11 ,
Coronavirus/COVID-19 ,
Delaware ,
Interest Rates ,
Lenders ,
Liquidity ,
Loans ,
Motion to Dismiss ,
NY Supreme Court ,
Restructuring ,
Supply Chain ,
Supply Shortages ,
Ukraine ,
Vaccinations
Despite the strength of the U.S. economy headed into the New Year, a variety of conditions may be conspiring against businesses in certain segments of the health care industry. These include reduced patient census at skilled...more
3/3/2022
/ Borrowers ,
Chapter 11 ,
Commercial Bankruptcy ,
Default ,
Dischargeable Debts ,
Financial Distress ,
Health Care Providers ,
Healthcare ,
Joint Venture ,
Loans ,
Medicare ,
Private Funds ,
Private Lenders ,
Restructuring
This past year was marked by extraordinary deal activity. Record breaking M&A activity drove record breaking private credit activity. Private equity M&A activity was at a substantial high, with over 8,500 deals worth $2.1...more
2/8/2022
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Debt Restructuring ,
Debtors ,
First-Lien ,
Insolvency ,
Lenders ,
Make-Whole Premium ,
Purdue Pharma ,
Reorganizations
Despite the Supreme Court’s rejection of a structured dismissal in 2017, there is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under...more
In its 2019 decision in Mission Product Holdings Inc. v. Tempnology LLC, the U.S. Supreme Court resolved a circuit split concerning the effect of contract rejection under Section 365 of the Bankruptcy Code. More specifically,...more
The primary investment thesis of a private credit lender is simple — get the loan repaid at maturity. Private credit lenders do not make loans as a means to acquire their borrower’s business. There are circumstances, however,...more
8/30/2021
/ 363 Sales ,
Article 9 ,
Bankruptcy Plans ,
Borrowers ,
Collateral ,
Credit Bids ,
Debt Collection ,
Debt Forgiveness ,
Debt Restructuring ,
Lenders ,
Loans