One common denominator links nearly all stressed businesses: tight liquidity. After the liquidity hole is identified and sized, the discussion inevitably turns to the question of who will fund the necessary capital to extend...more
10/15/2024
/ Borrowers ,
Capital Raising ,
Chapter 11 ,
Commercial Bankruptcy ,
Credit ,
Creditors ,
Enforcement ,
Equity ,
Liquidity ,
Loan Syndication and Trading Association (LSTA) ,
Loans ,
Reorganizations ,
Restructuring ,
Shareholders
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
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
Creditors of distressed businesses are often frustrated by shareholder- controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors' expense.
In these...more
9/30/2022
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Creditors ,
DE Supreme Court ,
Delaware ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Shareholders
Creditors of distressed businesses are often frustrated by shareholder-controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors’ expense. In these circumstances,...more
9/6/2022
/ Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Corporate Counsel ,
Creditors ,
DE Supreme Court ,
Fiduciary Duty ,
Insolvency ,
Limited Liability Company (LLC) ,
Shareholders ,
Solvents
The trend of direct lenders providing preferred equity financing to support sponsors and operating companies has only accelerated in the two years since we first wrote on the topic. Preferred equity instruments in general...more