Podcast: Credit Funds: Pro Rata Sharing Provisions – Key Points for Lenders
Minority senior secured lenders in syndicated deals rely on, among other provisions, the "sacred right" protections contained in the credit documents to protect the benefit of their bargained-for agreement: primarily, that...more
The court reassures lenders on the effect of a termination notice, the meaning of a continuing Event of Default and the effectiveness of reservation of rights letters: Re Pocket Renting. Appointment of administrator...more
Among the many financial innovations that came out of the COVID era, non-pro rata uptier transactions as a liability management exercise (“LMEs”) are among the more controversial. While lawsuits challenging non-pro rata...more
Introduction & Key Takeaways - The year 2024 ended with some major legal fireworks, as two important courts issued contrasting New Year’s Eve decisions on the validity of “uptier” liability management transactions that have...more
The United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) ruled on December 31, 2024 that Serta Simmons Bedding’s (“SSB”) 2020 uptier exchange included a transaction that, contrary to the assertions of...more
On January 18, 2024, the U.S. Bankruptcy Court for District of South Carolina entered judgment, after a bench trial, in favor of minority shareholders of a debtor whose liquidating trust had sued to recover dividend payments...more
Section 1124(2) of the Bankruptcy Code gives chapter 11 debtors a valuable tool for use in situations where long-term prepetition debt carries a significantly lower interest rate than the rates available at the time of...more
The Eastern District of Pennsylvania recently granted a creditor’s request to compel arbitration over a plaintiff’s argument that the arbitration agreement he had signed was void as a result of a bankruptcy court discharging...more
On March 18, 2019, Judge Stuart M. Bernstein of the United States Bankruptcy Court for the Southern District of New York issued a decision enforcing a mortgage lender’s claim for a prepayment premium (a/k/a make-whole or...more
The Delaware Bankruptcy Court recently voided the transfer of bankruptcy claims where the seller failed to obtain the debtor’s prior written consent, as required by the underlying promissory notes. Both the promissory...more
A make-whole provision (also known as prepayment premium or call protection) in a loan agreement usually requires a debtor to pay a penalty based on a fixed percentage of the amount of a loan balance the debtor voluntarily...more
The additional “default interest” owed when a borrower defaults under a loan agreement is a technical but highly critical part of any lending arrangement. This important “default interest” was the subject of a recent Ninth...more