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While intercreditor agreements (ICAs) are not necessarily the most attention-grabbing of the various loan documents common to large financing transactions, they are nevertheless important, and lack of attention to detail with respect to their provisions could lead to unintended results in any future bankruptcy case.
While intercreditor agreements (ICAs) are not necessarily the most attention-grabbing of the various loan documents common to large financing transactions, they are nevertheless important, and lack of attention to detail with respect to their provisions could lead to unintended results in any future bankruptcy case. For example, in Momentive Performance Materials, Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.) (MPM) –F.3d–, 2017 WL 4700314, Nos. 15-1682 (2nd Cir. Oct.20, 2017), and in In re Energy Future Holdings Corp., 842 F.3d 247 (3d Cir. 2016), the first lien creditors may have assumed that the second lien creditors had agreed to be subordinated and silent during bankruptcy, but the second lien lenders were nonetheless able to participate materially in those cases and to obtain value at the expense of senior creditors, primarily because the pertinent sections in the applicable ICAs were not sufficiently clear and explicit.
By Paul A. Rubin and Hanh V. Huynh
Employees of a troubled company who stay on as consultants to assist in liquidating its assets or preparing the company for a bankruptcy filing may later be disappointed to face claims to claw back their prepetition compensation.
By Howard C. Rubin and Deirdre M. Richards
When Entities May Not Have a Filing Choice and How Creditors Are Impacted
This article explores the difficulties some entities have encountered in filing bankruptcies and how one organization used extraordinary civil remedies in an attempt to accomplish what reorganization under Chapter 11 of the United States Bankruptcy Code would have provided.
By Adam L. Rosen
As widely reported, the downfall of Sears was a slow-motion train wreck. Despite its unique size and complexity, however, some of the strategies and techniques used by the stakeholders in Sears can be applied in cases of any size.
By Adam C. Rogoff
In today’s global economy, companies often have multiple business lines operating through separate entities. Outside of bankruptcy, these affiliated operations sometimes transact in a holistic — albeit legally distinct — debtor-creditor relationship with their counterparty. But, as this article discusses, the legal separateness of affiliates can hinder economic protections that a creditor might have otherwise when its counterparty files for bankruptcy.