and the Role of the Agent Navigating Divergent Interest of Lenders, - - PowerPoint PPT Presentation

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and the Role of the Agent Navigating Divergent Interest of Lenders, - - PowerPoint PPT Presentation

Jan 01, 2023 248 likes •454 views

Presenting a live 90-minute webinar with interactive Q&A Syndicated Credit Facility Restructuring and Workouts: Lender Strategy, Decision-Making and the Role of the Agent Navigating Divergent Interest of Lenders, Confidentiality Among

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Presenting a live 90-minute webinar with interactive Q&A

Syndicated Credit Facility Restructuring and Workouts: Lender Strategy, Decision-Making and the Role of the Agent

Navigating Divergent Interest of Lenders, Confidentiality Among Lenders, Avoidance of Privilege Waivers and More

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, AUGUST 2, 2016

Alison R. Manzer, Partner, Cassels Brock & Blackwell, Toronto James C. Schulwolf, Partner, Shipman & Goodwin, Hartford, Conn. Jeffrey A. Wurst, Partner, Ruskin Moscou Faltischek, Uniondale, N.Y .

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Syndicated Credit Facility Restructuring and Workouts: Lender Strategy, Decision-Making and the Role of the Agent Navigating Divergent Interest of Lenders, Confidentiality Among Lenders, Avoidance of Privilege Waivers and More August 2, 2016

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Speakers

Jeffrey A. Wurst Ruskin Moscou Faltischek, P.C. jwurst@rmfpc.com James C. Schulwolf Shipman & Goodwin LLP jschulwolf@goodwin.com Alison R. Manzer Cassels Brock & Blackwell amanzer@casselsbrock.com

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Who are the Lenders and How do Their Interests Diverge?

  • Types of Lenders

a) Banks, Mezzanine Funds, Hedge Funds, etc. b) Revolving Lenders, Term Lenders, and Equipment Lenders c) Sellers, Bondholders, and Government Agencies

  • Different Motivations

a) Getting Your Money Back b) Trading/Arbitrage c) Loan-to-Own d) Keeping the Borrower Alive?

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Who are the Lenders and How do Their Interests Diverge?

  • Different Regulatory (or Non-Regulated) Regimes

a) Capital/Reserve Requirements and Risk Ratings b) Unregulated Entities

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Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong

Exculpatory Provisions – Do/Should They Hold Up

  • What The Standard Terms Say

a) no duty or obligation except explicit b) no discretionary action c) no duty to disclosure

  • The Restructuring Issues

a) need for increased monitoring, credit b) need for speed and managing conflict c) increased reliance

  • Revisions That Address

a) include “troubled” loan clause b) revise voting levels c) increase responsibility, increase cover d) improve reporting

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Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong

Defaulting Lenders – Preventing Obstruction

1. What The Standard Terms Say a) can be replaced b) payment required - outstanding balance c) no sanction otherwise

  • The Restructuring Issues

a) can try to use to exit b) can cause funding (protective) advance issues

  • Revisions That Address

a) right to call for advance, make a default claim b) penalty buyout (discount) c) prohibit transfer d) subordinate on payment, no vote

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Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong

Agent Responsibilities

  • What The Standard Terms Say

a) nothing specific, no change for restructuring period b) ability to delegate c) ability to resign

  • The Restructuring Issues

a) speed of decision making b) need for further funds c) concern for expertise and continuity

  • Revisions That Address
  • a) ability to change for expertise
  • b) increase agents fees
  • c) improved discretion rights, protection
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Voting Rights

  • Basics

a) Required Lenders Generally i) Generally ii) By Loan Type b) Sacred Rights

  • Ensuring Voting and Approvals are Effective in

Managing a Restructuring

a) Counting Heads, Lining up Needed Votes b) Clear Directions to Agent c) Agent Discretion d) Avoiding the Squeaky Wheel

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Voting Rights

  • Variations Needed for Troubled Loan Circumstances

a) Yank-a-Bank and How to Document for It b) Ability of Required Lenders of One Loan Type to Make Decisions

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Common Interest Agreement

  • Joint Representation Confidentiality and Attorney-Client

Privilege

  • Negotiating Agreements
  • Accidental Privilege Waivers
  • Maintaining Confidentiality
  • Working Together Toward a Common Goal
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Complexities

Practical Effects of Divergent Interests (When It Goes Bad)

  • 1. dump and run – or - work it out
  • 2. protective advances – or – good after bad
  • 3. other relationships – or – this is it
  • 4. love the industry – or – hate the industry
  • 5. portfolio in trouble – or – just a “blip”
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Complexities

Arrival of New Lenders (Credit Trading, Sloppy Exit)

  • 1. generally allowed at any stage, consent
  • 2. borrower consent falls away, does agent/lender
  • 3. divergent purposes – need to understand
  • 4. preserving right to exit
  • 5. need a basis for control
  • 6. consider strategic competitors
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Role of Agent and Inherent Risks

  • Communications Can Be Dangerous in A

restructuring

  • What can, should, or must be disclosed
  • Second-Guessing by Co-Lenders – How Do You

Control

  • To act or not to act – Consensus or Disarray
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Lessons from GM

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Speakers

Jeffrey A. Wurst Ruskin Moscou Faltischek, P.C. jwurst@rmfpc.com James C. Schulwolf Shipman & Goodwin LLP jschulwolf@goodwin.com Alison R. Manzer Cassels Brock & Blackwell amanzer@casselsbrock.com