Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistKickerFeaturesTopicsCommercial LawSectionsNewsLJN Newsletters

Predicting Bondholder Activism

By J. Andrew Rahl, Jr.

Concerted action by public bondholders can be counted upon to attract attention in both the financial markets and the financial press. A current topical example is the wave of public debt refinancings, consent solicitations and conversion price resets that has ensued from enforcement of bondholder remedies for financial reporting covenant defaults (e.g., Peter Lattman and Karen Richardson, Hedge Funds Playing Hardball with Firms Filing Late Financials. The Wall Street Journal, Aug. 29, 2006, at A1). As the title of that article suggests, the image of bondholder activism in many quarters is one of rapacious bondholders aggressively pursuing a ruthless quest for returns. The reality is far more complex, but the outcome of particular cases may be surprisingly predictable for the astute analyst.

Bondholders unquestionably have become progressively more active and assertive over the course of the last three business cycles. That said, the course of many bondholder induced refinancings and restructurings it is possible to predict with some success in light of the considerations discussed in this article. These include: the current highly liquid market environment, the investment strategies of the particular holders of a given bond or note issue, the amount of it which is outstanding, and the dynamics of the bondholder committee process.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers Image

There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Transfer Tax Implications on Real Property Leases Image

The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.