In this issue of Davies Insolvency Now, against a backdrop of rising inflation and interest rates, we take a deep dive into the legislation that regulates rates of interest in Canada, drawing on recent court decisions to help...more
Although there may be differing views as to whether the U.S. economy is heading into some form of market correction, many would argue that certain warning signs have appeared that would suggest the possibility of an economic...more
With the COVID-19 pandemic continuing to adversely impact businesses across the globe, for the past year lenders have been reviewing their portfolios for credit degradation. Credit agreements will often contain a clause in...more
Private credit lenders started 2020 both with anticipation and trepidation. Activity levels were strong and default levels were at historic lows, but private credit lenders worried about the risk of economic headwinds –...more
In response to the COVID-19 epidemic, the U.S. government has provided relief to companies through various grant programs. The receipt of these grant proceeds represents a meaningful lifeline to many companies and the...more
For private investment funds with limited or no remaining uncalled commitments, net asset value (NAV) and hybrid credit facilities can provide a useful source of liquidity to support underperforming assets or allow funds to...more
The definition earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA have always been important and highly negotiated pieces of credit agreements and M&A transactions....more
With the economic disruption of the COVID-19 pandemic certain to continue through the end of 2020, now is the time to consider the impact of the virus on year-end reporting obligations, particularly those that relate to...more
1. Revisit your credit agreement to refresh your understanding of financial covenant requirements that may be at issue or subject to potential default in light of resulting business interruption and challenges. If there are...more
As COVID-19 sends shockwaves through the global economy, many experts are predicting one of the deepest recessions in U.S. history. The hospitality, employment services, transportation, travel, leisure, mining, and oil...more
Many businesses have joined the scramble that has taken place during the last weeks to secure a Paycheck Protection Program (PPP) loan. In many cases, such a loan will be key to being able to pay the wages and salaries of...more
The new $349 billion Payment Protection Program (“PPP”) administered by the Small Business Administration under the CARES Act began accepting loan applications on April 3, 2020, with more than $4.3 billion of loans processed...more
The U.S. Securities and Exchange Commission (SEC) has issued an order intended to facilitate the ability of business development companies (BDCs) to borrow under their existing credit agreements and issue new debt and...more
Article 4 of Law Decree no. 23 of April 8, 2020 (the so-called "Liquidity Decree") introduces an important though temporary, innovation in terms of simplifying the procedures, for retail customers, for executing contracts...more
The recently announced dispute between BorgWarner Inc. and Delphi Technologies PLC relating to BorgWarner’s planned acquisition of Delphi may turn into one of the first cases of a contested mergers and acquisitions (M&A)...more
Uncertainty over the scope and spread of the COVID-19 outbreak continues to negatively impact the domestic and worldwide economy. Disruptions to business as a result of stay-at-home or shelter-in-place orders, restrictions on...more
With respect to lender performance obligations (including to fund advances) under a New York law governed credit agreement, the COVID-19 crisis raises a question as to whether lenders may invoke force majeure (or similar...more
As countries around the world implement procedures to inhibit the spread of the COVID-19 coronavirus, many changes are obviously having increasingly adverse effects on the economy. With borders closed and free movement...more
Due to the COVID-19 pandemic and its uncertain impact on business operations and business continuity, many companies are reviewing their credit agreements with an eye toward their ability to borrow/re-borrow and potential...more
The unexpected emergence of the COVID-19 virus presents a wide range of new challenges and opportunities. The initial reaction of the syndicated market has been to pull back. In these times, private credit lenders act as...more