Insights
Events

Equitable Subordination and Recharacterization of Loans: Avoiding Pitfalls for Lenders, Creditors, and PE Sponsors

March 4, 2020 10:00am11:30am
Gary M. Kaplan

Gary Kaplan is speaking on the Strafford live webinar, "Equitable Subordination and Recharacterization of Loans: Avoiding Pitfalls for Lenders, Creditors, and PE Sponsors."

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.


Details:
Junior or unsecured creditors often assert equitable subordination and recharacterization claims against secured creditors in order to enhance recovery from highly leveraged debtors. When addressing the liquidity of their portfolio companies, PE sponsors are vulnerable to attacks on their claims.

Recharacterization claims usually involve insiders like stockholders, directors, and officers. However, the doctrine is not limited to corporate insiders, and courts will scrutinize both the debt instrument and the creditor's status.

Both doctrines are heavily litigated with recent cases that reflect the continued inconsistency among circuit courts and differing standards used among courts to scrutinize various loan transactions.

Listen as our authoritative panel of bankruptcy attorneys discusses the looming threats of equitable subordination and recharacterization in bankruptcy and how lenders, creditors, and PE sponsors can minimize exposure and protect their claims.

Click here for more information.

Firm Highlights

Publication

Non-Residential Lease Default Workouts, Security Deposits and Bankruptcy

What are the bankruptcy implications of the treatment of a tenant’s security deposit following a payment default?  Many non-residential tenants are now or are likely in the future to be unable to pay rent...

Read More
Publication

Wine Businesses, Lenders, and Difficult Conversations

The COVID-19 pandemic and public health efforts to combat it will impact different wine businesses in different ways. Those that depend on on-premise and direct-to-consumer (DTC) sales, such as restaurant, hospitality, and tasting room...

Read More
Publication

Treatment of Commercial Leases in Tenant Bankruptcy - The Basics

As the COVID-19 pandemic continues to wreak havoc with the nation’s economy, we have started to see bankruptcy filings by well-known companies such as GNC, J. Crew, Neiman Marcus, Modell’s, 24 Hour Fitness, Gold’s...

Read More
Publication

Questions Wineries Need to Answer Before Talking With Lenders About Coronavirus-Caused Financial Woes

The coronavirus pandemic and public health efforts to combat it will impact different wine businesses in different ways. Those that depend upon on-premise and direct-to-consumer (DTC) sales — such as restaurant, hospitality, and tasting room...

Read More
Publication

Hospitality Companies and Their Lenders: Preparing for Difficult Conversations

In a sudden reversal of generally expansionary trends, the hospitality business has been among the most immediate and badly hit economic sectors as a result of the COVID-19 pandemic, and the resulting stay-at-home and...

Read More