Secured Lending: Negotiating and Interpreting Best Efforts, Ordinary Course of Business, and Anti-Assignment Provisions
Documenting Grant of Security Interest in Assets Subject to Anti-Assignment Clause and Interpreting Complex Covenants
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will provide guidance on structuring anti-assignment clauses in secured debt financing agreements and interpreting financing agreement terms that are often not properly understood, including “ordinary course of business,” “best efforts,” “reasonable best efforts” and “commercially reasonable efforts.”
Outline
- Interpretation of certain common terms in debt agreements
- “Ordinary course of business”
- Common usage
- Case law guidance
- Recommendations
- “Best efforts,” “reasonable best efforts” and “commercially reasonable efforts”
- Common usage
- Case law guidance
- Recommendations
- “Ordinary course of business”
- Dealing with contractual and legal restrictions on assignment in the context of secured lending
- Contractual restrictions; interpretation of “assignment” and similar language
- Assignment of Claims Act
- FCC rules and recent case law
- The UCC “override” applicable to certain general intangibles and receivables assets—UCC Sections 9-406 through 408
- What the “override" does not do
- Important state variations and why they are important
- Related choice of law issues and documentation considerations
Benefits
The panel will review these and other issues:
- How should finance counsel craft “best efforts”-style obligations in their agreements to clearly reflect the intent of the parties and not promise either too much or too little?
- How do provisions in Article 9 of the UCC affect contractual and legal restrictions on assignment in connection with grants of security interests in debt financings?
- What are some ways secured lenders can structure the grant of security in assets subject to anti-assignment provisions in order to maximize the strength of their collateral position without violation of underlying restrictions?
Faculty
Yair Y. Galil
Of Counsel
Gibson, Dunn & Crutcher
Mr. Galil is a member of the Firm's Global Finance Practice Group. He represents a variety of clients,... | Read More
Mr. Galil is a member of the Firm's Global Finance Practice Group. He represents a variety of clients, including sponsors, issuers, financial institutions and investment funds, in complex financing transactions. The business contexts for these transactions have ranged from ordinary-course credit increases and refinancings to pivotal credit such as acquisition financings and debtor-in-possession and bankruptcy exit financings, as well as special-circumstances transactions such as debt buybacks and covenant relief amendments.
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Darius J. Mehraban
Partner
Gibson, Dunn & Crutcher
As a member of the firm's Global Finance Group, Mr. Mehraban focuses on loan and debt financing transactions,... | Read More
As a member of the firm's Global Finance Group, Mr. Mehraban focuses on loan and debt financing transactions, and swaps and other derivative transactions. His debt finance experience includes syndicated credit facilities for leveraged and investment grade borrowers, project and equipment financings, acquisition credit facilities, high-yield and convertible notes, and leasing and structured finance transactions.
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