Structuring Multi-Lender Agreements in Syndicated Facilities: Balancing the Rights of Agents and Co-Lenders
Borrower Defaults, Lender Defaults, Exculpatory Clauses, Information Sharing

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Banking and Finance
- event Date
Thursday, June 17, 2021
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will discuss typical clauses in a syndicated loan agreement and provide best practices for lenders and agents to structure and negotiate loan agreement provisions to protect their rights and interests and avoid being disadvantaged in a multi-lender transaction that goes south.
Faculty

Mr. Schulwolf is a partner in Shipman's Business and Corporate Practice Group. He focuses his practice on advising clients in financing, investment, acquisition, and restructuring transactions. In the Finance sector, Mr. Schulwolf regularly represents financial institutions including banks, mezzanine funds, and other institutional investors in structuring, documenting, and closing complex senior and mezzanine financings, including mezzanine financings with equity co-investments. He regularly represents lenders in connection with acquisition financings, financing of alternative energy projects (including wind, solar, and fuel cell projects), asset-based loans, cash flow loans, and syndicated credit facilities and he also represents Shipman's corporate clients and private equity portfolio companies in their financing transactions.

For nearly 40 years, Mr. Wurst has been a nationally recognized leader in the commercial finance community where he has represented large and small banks and commercial lenders as well as family-owned businesses providing sound advice and counselling on both legal and business matters. He is widely recognized for his hands on representation in commercial finance and bankruptcy matters. Mr. Wurst is skilled in his handling and supervising of complicated as well as routine debt finance transactions and is regularly called upon to handle loan workouts, asset-based lending, factoring, syndications, leasing and C&I, as well as bankruptcy matters, and turnaround situations stemming from transactions. He is called upon to provide advice to emerging finance companies. Mr. Wurst has spent a lifetime representing lenders and borrowers in both federal and state insolvency proceedings, including debtor-in-possession financing, disputed use of cash collateral, assignments for benefit of creditors and secured party sales under Article 9 of the Uniform Commercial Code. He is a fellow of the American College of Commercial Finance Lawyers and a panelist on the American Arbitration Association’s National Roster of Arbitrators.

Dr. Manzer is a partner in the Banking & Specialty Finance Group and Business Law practice. She has developed expertise in a wide range of practice areas combining skills to work effectively in most corporate/commercial practice areas, with a focus on financial services and structured transactions. Dr. Manzer's recent experience includes block chain and fintech applications. Her cross-border expertise has led to several leadership roles in leading U.S. business law organizations such as the American College of Commercial Finance Lawyers and the American Bar Association. Dr. Manzer has written many books on legal topics, primarily in areas of banking and specialized finance, and routinely lectures and speaks on a wide range of topics.
Description
Multi-lender agreements in syndicated loan facilities usually contain broad exculpatory provisions protecting the agent. Co-lenders are often left without recourse to recover damages when the agent does not act prudently, and proving gross negligence or willful misconduct of the agent is a tall task.
A common struggle between agents and co-lenders occurs when the borrower is in default and the agents and co-lenders disagree on how to proceed. If the loan documents do not expressly require the agent to comply with the co-lenders' instructions, the agent is free to ignore the wishes of the lenders.
COVID 19 challenges stressed many businesses and created a need for consideration of the syndicate roles and decision-making processes during difficult times--the traditional panel of voting rights and participation in credit facility increases often did not suit the times. The panel will discuss ideas and alternatives for disrupted economic times.
Listen as our authoritative panel of finance practitioners discusses typical clauses in a syndicated loan agreement and provides best practices for lenders and agents to structure and negotiate loan agreements to balance their respective rights and obligations.
Outline
- Responsibilities of agents
- Exculpatory provisions and case law
- Agent's rights
- Agent's errors and omissions
- Defaulting lender
- Defaulting borrower
Benefits
The panel will review these and other essential questions:
- What are typical exculpatory clauses that limit the liability of the agent and what case law is there addressing the agent's liability to co-lenders?
- What disclosures about the borrower, the terms of the loan, and borrower defaults must the agent provide to co-lenders?
- What provisions should be added to syndicated loan agreements to provide maximum protection and flexibility to agents and co-lenders?
- How can the definitions of "defaulting lender" and "impacted lender" affect co-lenders' remedies against defaulting lenders?
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