Mezzanine Lending Video Series (Episode 1)
Advancing Agriculture: Security Interests and Article 9 Challenges (Part 1)
The Privy Council has clarified that the duty of care to "obtain the best price reasonably obtainable" in the sale of secured collateral does not require a secured party to improve an asset before sale to obtain the best...more
Many subscription credit facilities will provide for the issuance of letters of credit in addition to the funding of loans. A letter of credit is an irrevocable undertaking for the payment of money issued by a bank at the...more
It is widely understood that fine art collectors frequently identify investment as a primary motivation for acquiring fine art. Considering the fluctuating financial markets and prevailing global uncertainties, many fine art...more
Oil and gas companies operating in the Gulf States frequently access financing to support their operations and exploration. The transactions involve unique legal complexities due to the nature of the industry and assets...more
Lenders extend loans with the belief that if a borrower fails to make debt service payments, the lender can sell the underlying collateral and recoup the outstanding balance of the loan. However, bankruptcy courts have the...more
When a borrower defaults under a loan agreement, you face a dual challenge: time pressure demands swift action, while legal complexities require precision. Whether confronting missed payments, breached financial covenants, or...more
Subscription credit facilities, commonly referred to as “sub-lines” or “capital call facilities,” are a cornerstone of private equity finance. These facilities are secured by a bespoke collateral package that protects lenders...more
EXECUTIVE SUMMARY - There is a spectrum of potential financing structures for a private credit fund (a “Credit Fund”) to obtain liquidity, including at various levels in the fund structure, such as at the fund level or by...more
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
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
Automated loan software can be effective for documenting consumer loans and some basic low-value commercial loans. However, most commercial transactions require greater attention on the front end than simple form generation....more
When a company enters bankruptcy, its assets are often sold to the highest or best bid. Secured lenders — those who have perfected liens on the company's assets — have a unique advantage under Section 363(k) of the Bankruptcy...more
Equity Commitment Letters (ECL) are legal documents pursuant to which one party (typically the main fund or multiple funds managed by the sponsor) (the ECL Provider) commits to providing a certain amount of capital, usually...more
A “negative pledge” on intellectual property is a common feature of venture lending transactions, but its implications can often be misunderstood. Some lenders may be surprised to discover that it does not always provide the...more
We have recently seen a notable uptick in the usage of equity commitment letters (ECLs) in fund finance transactions and have been spending an increasing amount of time discussing their merits with our clients’ credit teams....more
While the market for NAV financings—loans to funds supported by the net asset value of their portfolios—grew in 2023 and continues to rapidly evolve, a consensus has developed around what is sometimes referred to as a “Holdco...more
Our readers have been blessed with wonderful Fund Finance Friday articles dealing with the maintenance of collateral accounts in 'When Deposits Don’t Travel with Loans', control over collateral accounts in 'Control or Control...more
For loans primarily secured by a cash flow stream, subscription facility lenders heavily depend on collateral accounts as a key element of the security package. In this Legal Update, we delve into why subscription facilities...more
This constitutes the third in a four-part series that discusses the practice of repledging (sometimes referred to as “rehypothecation”), how standard agreements allow for repledging, the treatment of repledging under current...more
As most of our readers know, the majority of subscription facilities are secured by the right to call capital and receive capital contributions from the fund’s investors and the bank deposit account into which those capital...more
Whether in sales, syndications or securitization of equipment leases and loans, it is important—and often essential—that the assets be transferred from the seller to the buyer in a so-called “true sale.” That colloquialism is...more
The scope of the mandatory choice-of-law rule set forth in Uniform Commercial Code (UCC) section 8-110(a)(1), which provides that “the local law of the issuer’s jurisdiction . . . governs . . . the validity of a security,” is...more
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
Uses of Cryptocurrency Overview- As previously detailed, there are a number of regulations surrounding Cryptocurrencies which vary by location (State Regulations) and by federal agency (FINCEN Regulations, IRS Regulations,...more
The pandemic has hurt many companies. Fortunately, at the urging of the Federal government and with relief from regulators, many secured lenders have refrained from taking action against borrowers in default under the terms...more