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LBO Transactions in Bankruptcy: Fraudulent Transfer Issues for Lenders, Equity Purchasers, Shareholders

Impact of Merit Management and Other Recent Case Law

Recording of a 90-minute CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, May 31, 2018

Recorded event now available

or call 1-800-926-7926

This CLE course will update practitioners on the latest challenges to leveraged buyout (LBO) transactions in bankruptcy. The panel will explain the implications of particular deal structures, review underlying legal theories of creditor challenges, and outline best practices for mitigating risk or maximizing recovery.

Description

Leveraged buyout transactions continue to be aggressively attacked in bankruptcy cases as alleged fraudulent transfers to lenders, buyers and sellers alike. Between the Supreme Court’s decision in Merit Management Group, LP v. FTI Consulting, Inc., the Second Circuit’s decision in In re Tribune Fraudulent Conveyance Litigation, and the pending petition for certiorari from the Second Circuit’s decision in Deutsche Bank Trust Company Americas, et al., v. Robert R. McCormick Foundation, et al., the landscape for these claims continues to evolve. Even with these decisions, however, there is a still a lot of room for debate and a lot of disagreement between courts and jurisdictions.

Listen as our authoritative panel of bankruptcy attorneys discusses the recent decisions in fraudulent conveyance claims relating to LBO transactions, the issues that remain pending before the various tribunals, and which issues remain unresolved. As a part of this discussion, the panel will discuss different approaches to mitigating risk in LBO transactions, as well as potential areas of dispute in future claims.

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Outline

  1. Avoidance actions: standards in the LBO context
    1. Reasonably equivalent value
    2. Insolvency or unreasonably small capital
    3. Collapsing loan transactions
    4. Section 546(e) safe harbor
  2. Recent LBO/fraudulent transfer litigation
    1. Merit Management v. FTI
    2. Tribune
    3. Lyondell
    4. TOUSA

Benefits

The panel will review these and other crucial issues:

  • What factors are critical in a court’s analysis of whether an LBO is avoidable as a fraudulent conveyance?
  • Are any LBO structures less vulnerable to attack?
  • What are the safe harbors for LBO participants?
  • What steps can sellers and PE firms take to mitigate avoidance risks?

Faculty

Baer, Henry
Henry P. Baer, Jr.
Partner
Finn Dixon & Herling

His practice focuses on complex financial transactions involving distressed assets. He has significant experience...  |  Read More

Bonsall, Lisa
Lisa S. Bonsall
Partner
McCarter & English

She practices in diverse areas of litigation, focusing on commercial litigation and bankruptcy. She represents secured...  |  Read More

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