Lenders, Operating Agreements

Delaware Bankruptcy Court Rules that Bankruptcy Blocking Right in Debtor's Corporate Charter Violates Federal Public Policy

Jones Day on 10/22/2020

Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state...more

“Golden Shares” May be Fool’s Gold for Lenders

Sherman & Howard L.L.C. on 2/19/2018

February 16, 2018 – One of the biggest risks that any lender faces is a potential bankruptcy filing by its borrower. To counter that risk, lenders have developed creative strategies—with varying degrees of success—to gain...more

US Bankruptcy Filing Limitations - How Far Can You Go?

Dechert LLP on 10/6/2017

In order to file for bankruptcy, a corporate entity must be legally authorized to do so. Whether the bankruptcy petition has been duly authorized is governed by state law and often depends on the entity’s governance...more

Bankruptcy Restrictions in Operating Agreement Held Unenforceable

Mintz - Bankruptcy & Restructuring Viewpoints on 10/5/2017

In In Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy. As a condition to the loan,...more

Bankruptcy Courts Closing In – Will An Agreement Requiring Unanimous Consent To File For Bankruptcy Be Effective?

BCLP on 7/9/2016

We’ve all seen it. The business opportunity looks enticing but is laced with risk about a potential bankruptcy filing down the road. As bankruptcy lawyers we are often asked how deals can be structured to prevent a...more

Lenders Cannot Prevent Borrowers From Filing Bankruptcy By Owning Minority Equity With Veto Power Over Borrower’s Decision To File...

Sheppard Mullin Richter & Hampton LLP on 7/1/2016

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware refused to enforce a provision in the debtor’s LLC operating agreement requiring a unanimous vote of the debtor’s members to authorize the debtor to...more

California Amends LLC Law, Eases Lender Obligations

Manatt, Phelps & Phillips, LLP on 11/19/2015

Why it matters - Earlier this month, California Governor Jerry Brown signed into law Assembly Bill 506, a measure that amended the state's Revised Uniform Limited Partnership Act, making it easier for lenders to make...more

Lenders › Operating Agreements