As you know from our prior alerts, creditors of borrowers formed as Delaware LLCs (as opposed to corporations) lack standing under Delaware law to sue directors for breaching fiduciary duties even when, to the surprise of...more
4/26/2024
/ Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
DE Supreme Court ,
Delaware ,
Derivatives ,
Fiduciary Duty ,
Fraudulent Transfers ,
Limited Liability Company (LLC) ,
Standing
There is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under section 363 of the Bankruptcy Code. A structured dismissal is a...more
While global inflation and higher-for-longer interest rates dominated macroeconomic headlines over the last year, middle-market private credit restructurings witnessed three notable trends.
First, these credits remained...more
1/26/2024
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Debt ,
Debt Restructuring ,
Divestiture ,
High-Yield Markets ,
Interest Rates ,
Lenders ,
Middle Market ,
Motion to Dismiss ,
Price Inflation
Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors or asset buyers. The U.S. District Court for the District of Delaware recently reminded bankruptcy participants of an often overlooked...more
Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors, or asset buyers. The Delaware District Court recently reminded bankruptcy participants of an often overlooked pitfall involving the...more
12/1/2023
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Collective Bargaining Agreements (CBA) ,
Creditors ,
Debtors ,
Delaware ,
Free and Clear Transactions ,
NLRA ,
NLRB ,
Non-Discrimination Rules ,
Successor Liability ,
Successors ,
Unions ,
United Steelworkers
Once again, we reflect on the prior year for restructuring trends impacting private credit lenders. Last year it was all about “liability management”—the latest trend in which the limits of sponsor-favorable loan documents...more
1/18/2023
/ Bankruptcy Court ,
Capital Raising ,
Chapter 11 ,
Coronavirus/COVID-19 ,
Delaware ,
Interest Rates ,
Lenders ,
Liquidity ,
Loans ,
Motion to Dismiss ,
NY Supreme Court ,
Restructuring ,
Supply Chain ,
Supply Shortages ,
Ukraine ,
Vaccinations
In an important decision to private credit lenders, the Fifth Circuit Court of Appeals held that a make-whole premium for an unsecured creditor tied to future interest payments is the “functional equivalent of unmatured...more
Creditors of distressed businesses are often frustrated by shareholder- controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors' expense.
In these...more
9/30/2022
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Creditors ,
DE Supreme Court ,
Delaware ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Shareholders
Creditors of distressed businesses are often frustrated by shareholder-controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors’ expense. In these circumstances,...more
9/6/2022
/ Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Corporate Counsel ,
Creditors ,
DE Supreme Court ,
Fiduciary Duty ,
Insolvency ,
Limited Liability Company (LLC) ,
Shareholders ,
Solvents
This past year was marked by extraordinary deal activity. Record breaking M&A activity drove record breaking private credit activity. Private equity M&A activity was at a substantial high, with over 8,500 deals worth $2.1...more
2/8/2022
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Debt Restructuring ,
Debtors ,
First-Lien ,
Insolvency ,
Lenders ,
Make-Whole Premium ,
Purdue Pharma ,
Reorganizations
Despite the Supreme Court’s rejection of a structured dismissal in 2017, there is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under...more
In its 2019 decision in Mission Product Holdings Inc. v. Tempnology LLC, the U.S. Supreme Court resolved a circuit split concerning the effect of contract rejection under Section 365 of the Bankruptcy Code. More specifically,...more