LMTs often lead to litigation between the borrower and participating creditors, on the one hand, and non-participating creditors on the other. These "liability-management transactions" (or LMTs) typically involve a borrower that uses their existing financing documents to unlock value and secure new-money financing while circumventing unanimous creditor voting requirements and other negotiated protections. Liability management has emerged as a favored strategy for private companies facing financial challenges and seeking long-term restructuring solutions. The "go-to" LMTs: Drop-downs and uptier transactions In this edition, our US team examines trends in "liability management" and considers potential pitfalls, strategies, and issues important to both borrowers and creditors, including a discussion of recent decisions in the Serta Simmons chapter 11 case and their implications for clients and practitioners. Our global restructuring team has released its quarterly International Restructuring Newswire, which features articles from the US, Singapore, the Netherlands, UK/Germany and Australia on a range of recent developments in jurisdictions around the globe.
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