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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Thursday, January 16, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will provide finance and bankruptcy counsel with a review of the legal and economic issues in fraudulent conveyance avoidance actions for intercorporate guaranties, integrated transactions, and “designated-use loans”. The program will discuss how these transactions are at risk of being voided for lacking reasonably equivalent value and how lenders can show that indirect economic value from the transaction satisfies Section 548.

Faculty

Kyung S. Lee
Partner
Shannon & Lee, LLP

Mr. Lee practices in the area of debt restructuring and corporate reorganizations. He has served as debtor's counsel for companies in the airline, real estate, oil and gas, communications, healthcare, distribution, manufacturing and convenience store industries. He has also represented lenders, creditors, creditors' committees and investors involved in workouts and Chapter 11 reorganizations as well as litigating on behalf of the various parties. He has extensive experience working closely with senior management and financial advisors on valuation of enterprises and assets and development of turnaround and restructuring business plans.

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Ingrid Bagby
Partner
Parent: Cadwalader Wickersham & Taft Llp

Ms. Bagby's practice focuses on bankruptcy, restructuring and related litigation. She advises creditors, investors, private credit providers, market participants and other parties in bankruptcy cases and complex business reorganizations, and has extensive experience with cross-border restructurings, including acting for foreign representatives and other parties in U.S. and foreign proceedings. Ms. Bagby also advises clients on bankruptcy and claims resolution issues involving complex derivatives and structured products, and on the safe harbor provisions for financial contracts under multiple insolvency regimes. She has been recognized in the 2024 edition of IFLR1000 as a leading practitioner in Restructuring. Ms. Bagby has been named among Lawdragon’s 500 Leading U.S. Bankruptcy & Restructuring Lawyers since its inaugural issue in 2020, recognized as a key individual in corporate restructuring by the Legal 500 U.S., and recognized in Euromoney’s Guide to the World’s Leading Women in Business Law. She is recognized as an “Outstanding Young Restructuring Lawyer” by Turnarounds & Workouts and was included in the 2022 and 2023 editions of the Best Lawyers in America for her work in Bankruptcy and Creditor Debtor Rights /Insolvency and Reorganization Law and Bankruptcy Litigation.  In 2022, Ms. Bagby was recognized among the “Best Mentors” as part of ALM Corporate Counsel’s annual “Women, Influence & Power in Law” awards. She is the partner sponsor of Cadwalader’s Women’s Leadership Initiative and is a member of the firm’s Corporate Social Responsibility Committee, the Taskforce for the Advancement of Women, the Opinions Committee and the Center for Diversity & Inclusion Oversight Committee.

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Description

Intercorporate guaranties are commonly found in many financing deals, such as upstream, downstream, and cross-stream guaranties. Enforcement of guaranty obligations presents a risk the guaranty may be avoided for lack of consideration or as a fraudulent conveyance if the guarantor becomes a debtor in a bankruptcy case.

Also, when loan proceeds are designated for a specific use, as is often the case in leveraged buyouts, the borrower generally lacks control over the loaned funds. Thus, if the loan is challenged as a fraudulent transfer, then to establish the borrower received reasonably equivalent value from the loan, the lender often must show the borrower received other economic value from the loan transaction.

The reasonably equivalent value inquiry under Bankruptcy Code 548 (or analogous state law) provides a court with some discretion in applying the rules and standards to the facts of the transaction.

Listen as our authoritative panel of finance practitioners and litigators discusses the inherent risks in intercompany obligations of fraudulent conveyance avoidance actions, along with compelling arguments for the lender to establish reasonably equivalent value to the transaction to satisfy Section 548.

Outline

  1. Overview of types intercompany guaranties and integrated transactions at risk
  2. Fraudulent transfer analysis
    1. Timing of guaranty
    2. Reasonably equivalent value
    3. Financial condition of the guarantor
  3. Loans supported by intercorporate guaranties
  4. Integrated transactions and “designated-use loans”
  5. Best practices for lenders to establish a reasonably equivalent value

Benefits

The panel will review these and other key issues:

  • How do courts interpret "reasonably equivalent" value and will they consider indirect, intangible value or other benefits to the debtor?
  • How have courts applied the single integrated transaction doctrine and what kinds of transactions are at risk for courts collapsing the transactions?
  • What steps can lenders take to minimize insolvency-related risks inherent in intercompany guaranties and other complex lending transactions?