Liability Management Transactions

Overview

Sophisticated commercial lending documentation is constantly evolving, and Goldberg Kohn understands the risks that may arise when financing agreements do not clearly address and protect the rights and interests of administrative agents and lenders. So-called "liability management" transactions refer to two types of deals:

1. Asset and other dilutive transfers that are permitted based on negotiated provisions or holes in documentation.
2. Amendments to permit such transaction that are allowed with the consent of a subset of the lenders (i.e., majority rule). 

Goldberg Kohn has been at the forefront of identifying and limiting where possible provisions that, if included, would permit various dilution and "leakage" of collateral protection.

With respect to deals that can be accomplished by majority rule, our attorneys have structured ground-breaking transactions, in and out of court. When necessary, Goldberg Kohn has commenced litigation to protect minority lender rights and, conversely, to enforce majority rights against the disgruntled minority by using sophisticated provisions within the documents and developing case law.

With broad and deep experience negotiating, documenting and enforcing sophisticated commercial finance transactions, our attorneys have assisted administrative agents and lenders — whether in the same or separate documents — in understanding and navigating the risks, complexities and opportunities that arise in today's complex multi-lender transactions.  ­

Our Experience

As a firm that almost exclusively represents agents and lenders in middle-market finance transactions, we are well-versed in co-lender interactions and experienced in managing liability while protecting the interests of our clients. While our attorneys are skilled in achieving cost-effective resolutions and avoiding conflict, they are also successful in executing actions and counseling creditors in disputes, including litigation, as they arise.

As a pioneer in the creation of modern inter-lender agreements, Goldberg Kohn is uniquely suited to counsel clients when crafting agreements between multiple lenders. Particularly skilled at agreements among lenders and intercreditor agreements, our attorneys create specialized solutions that protect and advance our clients’ rights and interests.

Additionally, with deep knowledge in a wide array of actions and remedies, including inter-lender rights, budget dispute resolutions and board replacement exercises, lenders trust our firm to guide them through the most challenging situations.

Our Approach

As lender disputes become more common, Goldberg Kohn gives clients an advantage by creating effective solutions to help them enforce contractual rights in a manner that mitigates third-party litigation, and when necessary, prevent damage and mitigate risk when involved in these conflicts.

Middle-market senior secured lenders, junior lenders and large unsecured creditors can rely on Goldberg Kohn’s:

• Deep and lasting professional relationships throughout the lending industry.
• Considerable knowledge from previous and trending cases.
• Sensitivity to lenders’ industry-specific needs.
• Experience in protecting and enforcing rights and remedies.