second lien

Second Liens And Recharacterization: Is More Litigation Around The Corner?

Bob Eisenbach — Mon, 20 Oct 2008 01:03:29 +0000

In many Chapter 11 bankruptcy cases, unsecured creditors investigate whether a basis exists to recharacterize existing secured debt as equity. The reason? A successful challenge can turn first or second lien secured debt into "back-of-the-line" capital contributions, enabling unsecured creditors to realize a much greater recovery. A recent article by two of my Bankruptcy &

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Will Section 363 “Free And Clear” Sale Orders Survive An Appeal? A Recent Appellate Decision Raises New Doubts

Bob Eisenbach — Mon, 18 Aug 2008 11:30:40 +0000

The primary objective of any buyer at a Section 363 sale, whether one purchasing for cash or an existing secured creditor making a credit bid, is to obtain good title to the purchased assets free and clear of any liens, claims, or interests. However, a recent decision on this subject by the Bankruptcy Appellate Panel (“BAP”) of the United States Court of Appeals for the Ninth Circuit is causing…

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Are Risk Levels Rising For The Debt That’s Financing Private Equity Deals?

Bob Eisenbach — Thu, 26 Apr 2007 20:44:09 +0000

The New York Times DealBook blog has an interesting post about the risks posed by all the debt that helps fund the many private equity buyouts these days. It points to two articles in the UK press on the topic. The first article, in the Financial Times, discusses comments by Larry Fink, the CEO of BlackRock, about how increasing levels of debt, lowered risk premiums, and less restrictive lending…

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New Article On How Distressed Debt Investors Are Preparing For The Next Economic Downturn

Bob Eisenbach — Fri, 30 Mar 2007 17:19:03 +0000

The DealBook blog from the New York Times has an interesting post entitled "Stocking Up For A Storm." It describes how certain investment banks have been expanding their distressed debt businesses, believing that the length of the current "good times" period may actually lead to an increase in the level of distress when the economy finally turns. The DealBook post points readers to a new…

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Second Liens and Intercreditor Agreements: Are Those Bankruptcy Voting Provisions Really Enforceable?

Bob Eisenbach — Fri, 19 Jan 2007 04:47:14 +0000

In this post I look at the second lien phenomenon and then discuss an interesting new case addressing whether a fairly common intercreditor agreement provision — giving a senior lender the right to vote a second lien lender’s claim in bankruptcy — will actually be enforced. Senior Debt And Mezzanine Financing. When a company borrows from a bank, it typically grants the bank a first priority…

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