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Lenders › Chapter 11 › Fiduciary Duty

Jones Day

Chapter 11 Filing Without Consent of Independent Director Dismissed as Unauthorized

Jones Day on

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

Kilpatrick

When Provisions in a Loan and LLC Agreements Do Not Impermissibly Restrict a Bankruptcy Filing

Kilpatrick on

In In re 301 W North Avenue, LLC, 2025 WL 37897 (Bankr. N.D. Ill. 2025), a bankruptcy court recently addressed provisions in a loan agreement and limited liability company (“LLC”) operating agreement as to their effect on...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

King & Spalding

District of Oregon Limits Lender Liability Based on Alleged Control Absent a “Special Relationship”

King & Spalding on

On June 29, 2022, the U.S. District Court for the District of Oregon dismissed a bakery’s breach-of-fiduciary duty and other lender-based claims against a strategic investor and lender. In connection with an attempted...more

Jones Day

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

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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

Proskauer Rose LLP

The “Golden Share”: All That Glitters Is Not Gold

Proskauer Rose LLP on

A recent, highly anticipated ruling by a Bankruptcy Court in Delaware has reilluminated the concept of a "golden share". While an appeal of the ruling seems likely, this latest ruling by Delaware Bankruptcy Judge Mary F....more

Jones Day

Fifth Circuit Rules That Corporate Charter Provision Requiring Shareholder Consent for Bankruptcy Filing Is Enforceable but...

Jones Day on

In a highly anticipated decision, the U.S. Court of Appeals for the Fifth Circuit recently affirmed a bankruptcy court order dismissing a chapter 11 case filed by a corporation without obtaining—as required by its corporate...more

Mintz - Bankruptcy & Restructuring Viewpoints

Bankruptcy Restrictions in Operating Agreement Held Unenforceable

Mintz - Bankruptcy & Restructuring Viewpoints on

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

Jones Day

Focus on Health Care Provider Bankruptcies

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The next few years are expected to see a significant increase in the volume of bankruptcy cases filed by health care providers. Thus far in 2017, the number of bankruptcies in health care-related sectors, including hospitals,...more

Dickinson Wright

Supreme Court of Canada Upholds Priority for DIP Lenders in CCAA Proceedings

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Overview - On February 1, 2013, the Supreme Court of Canada (the “SCC”) affirmed the priority granted to Debtor-In-Possession (“DIP”) lenders who provide capital to debtor companies undergoing the restructuring process...more

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