News & Analysis as of

Chapter 11 Borrowers

Shipman & Goodwin LLP

Strategic Alternatives: Mastering Deeds-in-Lieu, Friendly Foreclosures and Navigating Bankruptcy Scenarios

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While traditional enforcement often requires judicial intervention, alternative resolution strategies can deliver superior outcomes with reduced costs, compressed timelines, and diminished reputational impact. Understanding...more

Clark Hill PLC

How Bankruptcy Courts Interpret Intercreditor Agreements: The Uncertainty of Judicial Perspective

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Intercreditor Agreements typically are contractual arrangements among lenders of similar or differing priorities to a single borrower secured by the assets of the borrower, often including real estate assets. These multiple...more

Proskauer Rose LLP

Private Credit Restructuring: Strict Foreclosure Spotlight

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Chapter 11 is expensive and not always the right tool, particularly for a restructuring of a company with a broken balance sheet, as compared to a business with a broken business model. We have seen a significant uptick in...more

Proskauer Rose LLP

Private Credit Restructuring Trends: Sponsor Capital Infusions in Times of Distress

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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

Troutman Pepper Locke

Cooperation Agreements Help Distressed Lenders Negotiate as One

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Cooperation agreements are a new tool for distressed debtholders seeking to negotiate from a position of unity and strength. These agreements can also help debtholders defend themselves against a growing opportunistic...more

Porter Hedges LLP

Real Estate Planning Tips: What is Cancellation of Indebtedness ("COD") Income?

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The commercial real estate market is in the process of adjusting to lower property valuations. Much recent focus has been on office buildings, and the fallout from enduring reductions in occupancy associated with remote and...more

Bowditch & Dewey

Ten Reasons to Expect an Increase in Financial Restructurings in 2025

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1. Commercial Chapter 11 Bankruptcy Filings Have Increased Significantly Year-Over-Year: There has been a significant increase in the number of commercial Chapter 11 cases (larger company filings) in 2024. By way of example,...more

Arnall Golden Gregory LLP

Restructuring Roundup - March 2024

AGG’s Restructuring Roundup newsletter is a monthly update of legal issues and news affecting or related to commercial litigation and bankruptcy. The newsletter is a curation of published articles and news, and contains...more

Jones Day

Cure and Reinstatement of Defaulted Loan Under Chapter 11 Plan Requires Payment of Default-Rate Interest

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Section 1124(2) of the Bankruptcy Code gives chapter 11 debtors a valuable tool for use in situations where long-term prepetition debt carries a significantly lower interest rate than the rates available at the time of...more

Proskauer Rose LLP

Trends in Private Credit Restructuring: Out of Court “Change of Control” Transactions

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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

Goodwin

Second Circuit Rules that Syndicated Loans Are Not “Securities” Under State and Federal Law

Goodwin on

On August 24, 2023, the U.S. Court of Appeals for the Second Circuit in Kirschner unanimously  held that notes evidencing syndicated loans do not plausibly qualify as “securities” covered by state and federal securities laws...more

Cadwalader, Wickersham & Taft LLP

Fore!ward June 2023 - Make-Whole Clauses: It's All About the Enforceability Question

Make-whole clauses (also known as prepayment premiums, call premiums or call protection) are provisions in financing transactions that require the borrower to make a specified payment to the lender if a loan is prepaid before...more

Seward & Kissel LLP

Bank Contagion Spreads, Celsius Still Sending the Wulf? Voyager Nearing End of Journey, and Info (Salary) Wars

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Crypto-friendly lender Silvergate collapses | CNBC - Silvergate, a Crypto focused lender, announced it will wind down its operations and voluntarily liquidate the bank. This announcement comes a week after Silvergate...more

Nelson Mullins Riley & Scarborough LLP

The Not-So-Automatic Stay for Foreign Assets and Creditors

When a debtor files for bankruptcy, it’s axiomatic that all creditors, wherever located, must immediately cease their efforts to collect on debts owed to them by that debtor, right? Not necessarily so, says the United States...more

Nelson Mullins Riley & Scarborough LLP

Good Problems to Have: Recovery of Interest by Unsecured Creditors of a Solvent Chapter 11 Debtor

Imagine this: you sell a product to a company on credit at 8% interest until you are paid, and the company files for bankruptcy before repayment.  Or maybe you are a hard money lender that made an unsecured loan at 18% to a...more

Proskauer - Health Care Law Brief

Diagnosing Distress: Top 5 Challenges for Private Credit Lenders in Health Care Restructurings

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

Morgan Lewis

When Is a Guaranty Claim Reduced by Recovery in a Debtor’s Bankruptcy Case?

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Consider a lender that extends a term loan in the amount of $1 million to an entity debtor. The loan is guaranteed by the debtor’s owner. If both the debtor and the guarantor become subject to bankruptcy cases, it is settled...more

Foley & Lardner LLP

SBA Change of Control Guidance Does Not Work for Insolvent PPP Borrowers

Foley & Lardner LLP on

This article focuses on the recent “change of control” guidance issued by the SBA to its PPP lenders (the “Guidance”) and, more specifically, how that Guidance affects insolvent PPP borrowers when they need to sell assets. As...more

Kramer Levin Naftalis & Frankel LLP

We Can Work It Out: Overcoming Obstacles to Real Estate Workouts

Real estate lenders and borrowers everywhere are trying to figure out what to do with properties that are either sitting vacant or underperforming pre-pandemic expectations. In New York, a number of mezzanine foreclosures...more

Patterson Belknap Webb & Tyler LLP

The Best Laid Plans: How a Proposed Sale of NYC Real Estate Under Section 363 of the Bankruptcy Code Went Awry

There are several ways in which property owners can advantageously use the Bankruptcy Code to effectuate strategic dispositions of assets. But the bankruptcy process can be fraught with uncertainty that can upend the best...more

Jones Day

Cram-Up Chapter 11 Plans: Reinstatement and Indubitable Equivalence

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"Cramdown" chapter 11 plans, under which a bankruptcy court confirms a plan over the objection of a class of creditors, are relatively common. Less common are the subset of cramdown plans known as "cram-up" chapter 11 plans....more

Lowenstein Sandler LLP

How To Respond When Your Banker Requests A Visit

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Borrowers should not be surprised when their lender requests a “checkup,” financial review, or audit. Lenders are nervous. Despite long-term institutional relationships with customers, many banks are seeking to reduce...more

Lowenstein Sandler LLP

How to Use and Not Use Chapter 11 in Bad Economic Times

At the moment, the bankruptcy court may be an unfriendly place for impatient lenders. As the United States and much of the world reel from the coronavirus pandemic, many businesses’ revenues have been shut off (or close to...more

Mitchell, Williams, Selig, Gates & Woodyard,...

Assignment of Rents and Bankruptcy

If you are a lender whose collateral includes rents from an apartment building, shopping mall, or other income-producing property, you might want to check your loan documents to be sure that you have taken an absolute...more

Partridge Snow & Hahn LLP

Lenders Take Notice - A New Bankruptcy Subchapter Goes Into Effect February 19, 2020 - Increased Filings Expected

The Small Business Reorganization Act (SBRA) goes into effect on February 19, 2020. The SBRA creates a new Subchapter V to Chapter 11, expanding access to bankruptcy relief for small businesses. With a debt ceiling of...more

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