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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Tuesday, October 22, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will discuss advanced and emerging debtor-in-possession (DIP) financing issues that are the subject of significant judicial scrutiny and intense negotiations between DIP lenders and other secured creditors. The panel will address the rise of aggressive equity-linked or convertible facilities as well as roll-overs and roll-ups, cross-collateralization, priming liens, super-priority claims on avoidance actions, intercreditor disputes, and more.

Faculty

Robert Miller
Assistant Professor of Law
University of South Dakota

Professor Miller was a partner in the corporate restructuring department of Manier & Herod, P.C. in Nashville, Tennessee. His practice focused on representation of insurance companies in large national and international insolvency matters as well as chapter 11 trustees and unsecured creditors’ committees in regional cases. He also taught the Business Associations class at the Nashville School of Law. Prior to practicing, Professor Miller served as the law clerk for the Honorable William L. Stocks of the United States Bankruptcy Court for the Middle District of North Carolina. He is a graduate of the Emory University School of Law. Professor Miller joined the USD Knudson Law faculty in 2022. Professor Miller teaches debtor-creditor rights, secured transactions, and other related courses.

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Debra McElligott Sinclair
Partner, Business Reorganization & Restructuring
Willkie Farr & Gallagher, LLP

Ms. Sinclair is a partner in the Business Reorganization and Restructuring Department. She represents debtors, lenders, official committees of unsecured creditors, and ad hoc creditor groups comprised of hedge funds, financial institutions and other sophisticated investors in distressed situations. Ms. Sinclair advises clients on all aspects of complex chapter 11 cases and has experience with distressed acquisitions, bankruptcy litigation, cross-border matters and out-of-court restructurings. She has represented parties in restructurings in industries such as real estate, aviation, manufacturing, retail, energy, and pharmaceuticals.

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Description

DIP lenders can have an ever-expanding list of conditions for extending post-petition financing: roll-overs and roll-ups, cross-collateralization, priming liens, super-priority claims on avoidance actions, releases, representations, waivers, and more. Lenders continue to push the limits of what courts allow.

Another tool, giving the debtor or DIP lender an option to convert outstanding amounts owed under the DIP facility to equity in the reorganized debtor, is not a new proposition. However, increasingly, DIP lenders are insisting on an allocation of a percentage of the reorganized equity at discounted, untested values as part of the DIP facility. Judges and stakeholders alike are troubled with a DIP financing entered into in the early days of the case that all but predetermines how the reorganization will end before it begins and outside the plan process. Debtors and DIP lenders have developed a number of potential workarounds, some successful and some not.

Listen as our authoritative panel of bankruptcy practitioners offers insights into the rising prevalence of equity-linked DIP facilities and related concerns, reviews recent decisions on DIP financing, and provides practice tips for counsel that represent DIP lenders, other secured lenders, and debtors.

Outline

  1. Equity-linked DIP lending
  2. Priming liens and disputes
  3. Rollover of pre-petition secured debt
  4. Releases and waivers of challenges to liens and other future borrowings
  5. Role of Bankruptcy Directors

Benefits

The panel will review these and other key issues:

  • What must counsel consider in evaluating defensive vs. offensive DIP loans?
  • Does equity conversion in the DIP facility incentivize undervaluation or sidestep confirmation requirements?
  • How does the debtor seeking a priming lien convince the existing lender to consent or convince the court that the current lender's lien is adequately protected?