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Cash Collateral & DIP Financing
When your borrower files bankruptcy, choosing to cooperate can lead to a more successful restructuring or sale. Here’s how to protect yourself if you do.
It’s typical for secured lenders in a chapter 11 case to set aside a portion of the proceeds of its collateral to pay professional fees. Understand what you may need to know about carve-out fees.
Will lenders loan to a company in bankruptcy? In this installment, uncover the many intricacies of DIP financing & cash collateral motions in bankruptcy.
TPLF represents billions in litigation investing. Litigation funding in the US rose to $2.8 billion last year — $17 billion worldwide. Read about ethical risks looming large.
A curious mystery unraveled. Learn about the significant aspects of an Assignment for the Benefit of creditors, and why knowing the Assignee is important.
The Jevic case upheld the absolute priority rule, but it did not prohibit structured dismissals. How are structured dismissals affected post-Jevic?
Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question Tom S. wrote in asking, I am a hard money lender and have loaned on all sorts of collateral, but I’ve never loaned on raw land before. A builder wants to pledge some land as collateral. What special risks does raw land collateral pose to a lender? Answer Raw land is often inventoried by developers and is usually in some […]
The ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency In this installment, we take you on a tour of the time leading up to the filing of a chapter 11 case and the days that immediately follow. Mostly, we’re referring to first day motions. Before we dive into first day motions, however, you should understand that a debtor and its professionals are typically doing many other things immediately before and after they file a chapter 11 petition. For example: Continuing to explore alternatives to chapter 11 Negotiating with various parties […]
Considerations for Companies in a Cash Crisis A liquidity crisis is a severe financial situation in which a company does not have enough cash or cash-convertible assets, which can lead to defaults and bankruptcy. Managing cash is critical when working to preserve or maintain solvency in order to maximize opportunities for a successful turnaround or corporate restructuring. Near-Death Liquidity Is Like a Melting Ice Cube Insufficient liquidity shrinks the range of options for a financially distressed business. The metaphor of a melting ice cube is often used to illustrate this […]
How Brevity in Financing Statements Can Lead to Insufficient Collateral Descriptions Our fast-paced society, coupled with the tendency for people to use shorthand in communications by emails and Twitter, influences everyone to look for ways to save time and be less verbose. When preparing and filing a UCC-1, however, brevity can be the filer’s enemy. Description of Collateral in Security Agreements Article 9 of the UCC provides that a security agreement must “provide a description of the collateral.” A description of collateral under Article 9 is usually considered adequate if […]