• videocam On-Demand Webinar
  • signal_cellular_alt Intermediate
  • card_travel Bankruptcy
  • schedule 90 minutes

Bankruptcy Limits on Lockup Provisions: Enforcing Section 1125, Creating Meaningful Outs, Ensuring Adequate Information

Lessons From In re Gol Linhas Areas Inteligentes S.A., Avoiding Pitfalls and Problematic Terms

About the Course

Introduction

This CLE webinar will review the enforceability of lockup provisions and the lessons from recent decisions where they were rejected. The panel will examine the In re GOL decision and offer guidance for avoiding the pitfalls of overreaching when structuring and drafting lockup provisions.

Description

In reorganizations with contentious or complex creditor constituencies and no obvious way forward, parties may enter into agreements containing lockup provisions to obtain creditor support for confirmation of a Chapter 11 plan or certain designated plan provisions. These agreements can greatly reduce the risks of a bankruptcy filing and provide a clear path forward through an in-court reorganization.

The enforceability of lockup agreements depends on many things, including not violating Section 1125 of the Bankruptcy Code and offering adequate information about a proposed plan. However, they are often attacked as being an impermissible solicitation of creditor votes, manipulation of the plan process, and strong-arm tactics aimed at hamstringing independent creditors. Lockup obligations can affect the rights of other creditors because plan approval proceeds by class and not every creditor may have signed the lockup agreement.

In In re GOL, the bankruptcy court surprised many by rejecting the lockup provisions offered in that case, but then provided new and extensive guidance on the enforceability of lockup provisions.

Listen as this experienced panel of bankruptcy attorneys discusses lessons from In re GOL and offers guidance about the limits of lockup provisions.

Presented By

Andrew V. Alfano
Counsel
Pillsbury Winthrop Shaw Pittman LLP

Mr. Alfano regularly advises companies facing financial distress, purchasers and investors in distressed businesses, and lenders and other creditors of troubled companies in all stages of complex restructurings. His work spans a variety of industries, most recently including pharmaceuticals, aviation, electric vehicles and energy storage.

Jaime Leggett
Attorney
Best Amron

Mr. Leggett practices in the areas of bankruptcy and complex commercial litigation. His experience includes investigating and prosecuting director and officer liability claims; representing trustees, creditors, equity holders, and debtors in bankruptcy proceedings; federal and state court commercial litigation; and trials in federal, bankruptcy, and state courts nationwide.

Rafael Zahralddin
National Practice Group Leader & Managing Partner
Quintairos, Prieto, Wood, & Boyer, P.A.

Mr. Zahralddin is the Managing Partner of the Wilmington, Delaware office of QPWB and National Practice Group Leader of the Business Law and Commercial Litigation Practice Group. A highly distinguished business attorney and litigator with over 30 years of experience, Mr. Zahralddin advises a global clientele on complex matters involving corporate and commercial litigation, bankruptcy, creditors' rights and workouts, and mergers & acquisitions. He focuses his practice on international law and trade, privacy, data protection and cybersecurity, and regulatory and compliance services, including the Foreign Corrupt Practices Act (FCPA) and cannabis law, utilizing a sophisticated approach to navigate complex international and domestic landscapes. Mr. Zahralddin also provides strategic counsel on intellectual property and internet law, as well as corporate governance matters.

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


  • Live Online


    On Demand

Date + Time

  • event

    Thursday, March 6, 2025

  • schedule

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

  1. Provisions for debtors
  2. Provisions for creditors
  3. Problematic terms
    1. Solicitation vs. negotiation
    2. Giving plan supporters better treatment
    3. Milestones
    4. Fiduciary terms
  4. Drafting best practices

The panel will review these and other key issues:

  • What is the difference among a "restructuring support agreement" (or RSA), "plan support agreement" (or PSA), or "lockup agreement"?
  • What are the key requirements in Section 1125 that affect enforceability of lockup agreements?
  • What happens if the plan contemplated in lockup provisions becomes impossible?
  • Can parties agree to oppose plans with certain undesirable provisions?