Feb 12, 2021
This CLE webinar will offer best practices for counsel to lenders, creditors, and private equity sponsors to structure transactions and lending practices to protect their claims and maintain their priority status against junior and unsecured creditors or borrowers facing insolvency or bankruptcy. Eric will discuss, in detail, how DIP financing is often subject to an evolving list of conditions by lenders to limit the risks of post-petition financing. Challenging terms include roll-overs and roll-ups, cross-collateralization, priming liens, and super-priority claims on avoidance actions. Pre-petition lenders often seek releases from the debtor regarding the validity, priority and amount of the pre-petition claims, and a release of defenses. Other terms include carve-outs, liens on avoidance actions, Section 506(c) waivers, and waiver of the automatic stay.
Panelists will also discuss one of the ABI Commission's proposals for Chapter 11 reform
which seeks to reduce the level of control secured lenders have in Chapter 11
cases and give more power to debtors and junior creditors, including possibly
limiting the impact of inter-creditor agreement provisions that make it
difficult for junior secured creditors to offer competing DIP financing.
Courts, therefore, are more mindful of secured creditor overreach and more
willing to question lender demands.
- Overview of subordination and
recharacterization in bankruptcy
- Equitable subordination
- Subordination of claims based on purchase or sale of securities
- Recent case law
- Litigation considerations
- Minimizing attacks on the claim
- Secured lenders
- Collateral review
- PE sponsors
- Anticipating liquidity problems
- Internal governance procedures
- Arm's length transactions
- Management rights or other control of business operations
- Non-statutory insiders
- Claimants with securities purchase/sale related claims
More information and registration can be found here.