News & Analysis as of

Chapter 11 Loans Creditors

King & Spalding

Trustee’s Suit Seeking Clawback of Bank Fees as Fraudulent Transfers Survives Summary Judgment

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On March 12, 2025, the U.S. Bankruptcy Court for the District of Delaware denied four banks’ motion for summary judgment in an action seeking to claw back $35 million in fees associated with a $1.8 billion loan that allegedly...more

Nelson Mullins Riley & Scarborough LLP

Make-Whole Premiums in Bankruptcy: Clarity in Drafting, Certainty in Recovery

In the world of commercial lending, certain contract provisions often go unnoticed—until the moment they matter most. Make-whole premiums are one such example. Typically tucked deep in loan agreements, these provisions are...more

Jones Day

Fifth Circuit Rules that Serta Simmons Uptier Violated Credit Agreement, Rejects Equitable Mootness as Bar to Review of Chapter 11...

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In In re Serta Simmons Bedding, LLC, 125 F.4th 555 (5th Cir. 2024), as amended, No. 23-20281 (5th Cir. Jan. 21, 2025), revised and superseded, No. 23-20181 (5th Cir. Feb. 14, 2025), reh'g denied, No. 23-20181 (5th Cir. Feb....more

Proskauer Rose LLP

Private Credit Restructuring: Priming DIPs in Focus

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In most chapter 11 cases, existing first lien lenders provide post-petition financing to preserve collateral value and maximize recovery. In some situations, a stressed borrower may threaten to pursue a hostile chapter 11...more

Akerman LLP

Your Collateral Can Disappear in Chapter 11

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Suppose you have made a loan and your collateral includes a lien on receivables or inventory. If your borrower files Chapter 11, you are in danger of your collateral disappearing during the Chapter 11 case. Here's how....more

Seward & Kissel LLP

Fifth Circuit Reverses Bankruptcy Court’s Ruling on Lenders’ Sacred Right of Pro Rata Repayment in Uptiering Transaction

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On December 31, 2024, the Fifth Circuit Court of Appeals overturned the Bankruptcy Court for the Southern District of Texas’ (the “Bankruptcy Court”) decision that the exchange by certain lenders of Serta Simmons Bedding, LLC...more

Akin Gump Strauss Hauer & Feld LLP

Serta - Fifth Circuit Decision

On December 31, 2024, the U.S. Court of Appeals for the Fifth Circuit issued its long-awaited decision regarding the permissibility of the Serta Simmons Bedding (Serta) uptier liability management exercise (the 2020 Uptier)...more

Morrison & Foerster LLP

Latest Uptier Decisions in Serta and Mitel Remind Contract Language Matters

The caselaw on “uptiers” as liability management exercises (LMEs) grew by two opinions on the last day of 2024. In Serta, the Fifth Circuit reversed the bankruptcy court’s blessing of the pre-bankruptcy uptier and...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

Kelley Drye & Warren LLP

No Honor Among Creditors: Delaware Judge Issues Important Ruling On “Uptier” Transaction

Intercreditor disputes in bankruptcy are common. Typically, however, they center around predictable disagreements between senior or junior classes of creditors such as valuation battles or lien perfection challenges. A...more

Jones Day

An Equitable Tightrope: Blackjewel's Balancing Act on After-Acquired Property in Bankruptcy

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It is well recognized that, in keeping with the "fresh start" or "rehabilitative" policy, the Bankruptcy Code invalidates after-acquired property clauses in prepetition security agreements, but also includes an exception to...more

Skadden, Arps, Slate, Meagher & Flom LLP

Recent Developments in the Enforceability of Make-Whole Premiums in the Second Circuit

In March 2019, Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York ruled that lenders using clear and unambiguous language in their loan agreements may be entitled to prepayment...more

Polsinelli

The Devil's Dictionary of Bankruptcy Terms: Venue

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The "Devil's Dictionary" is a quick-reference guide for commercial lenders and other restructuring professionals. In this series, we highlight many of the buzz words found in the Dictionary and used in today's bankruptcy...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Recent Rulings Underscore Importance of Careful Drafting of Make-Whole Payment Provisions"

Under long-established common law, loans must be paid only upon maturity, not before. This "perfect tender in time" rule is the default rule in a number of jurisdictions. Many indentures and credit agreements therefore either...more

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