About the Course
Introduction
This CLE webinar will discuss the use of liability management transactions (LMTs) in debtor-in-possession (DIP) financing facilities, specifically in non pro rata roll ups, identify and evaluate helpful decisions in this still-developing area, and offer insights about the issues that will likely have to be addressed when resolving objections to these practices.
Description
LMTs are now appearing as non pro rata DIP rollups: proposed DIP financing only rolls up the prepetition debt of a favored lender group. Lenders not included in the roll ups are objecting on many of the same grounds raised in non-bankruptcy LMTs, but there is scant insight on how courts actually view these issues because the objections get settled.
In May 2026, the U.S. Bankruptcy Court for the District of New Jersey held that by itself, a roll up of pre-petition debt in DIP financing did not trigger a pro rata sharing provision in the applicable prepetition credit agreement. It left for another day, how pro rata sharing might be enforced once payments under the DIP facility began. This approach stands in contrast to how other influential bankruptcy courts have addressed the issue.
Listen as our panel of esteemed practitioners discusses the evolving and controversial use of LMTs in DIP financing facilities, best practices for reducing the amount of litigation that is likely to result from LMTs related to roll ups, and unique bankruptcy issues that disparate treatment may create.
Presented By
Ms. Hailey’s practice focuses on corporate restructuring, insolvency, bankruptcy, and domestic and cross-border financial transactions. She regularly assists corporate debtors, creditors, investors, and financial counterparties in domestic and cross-border bankruptcy-related transactions and out-of-court workouts. Ms. Hailey also frequently advises clients on debtor-in-possession financing, exit financing and loan forbearance, and liability management transactions.
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Ms. Harris is a finance practitioner whose practice focuses on special situations and esoteric finance transactions. As part of Dechert’s cross-disciplinary Capital Solutions group, she advises asset managers, financial institutions, corporations, issuers and creditor groups on sophisticated financing, restructuring and liability management matters across the capital structure and at every stage of the investment. Ms. Harris’s practice centers on distressed and structured financings, secured lending and debt restructuring transactions. Her experience includes advising on bespoke special situation lending solutions such as DIP and exit financings, FILOs, second-lien and mezzanine facilities, as well as complex intercreditor arrangements and liability management transactions designed to address challenged capital structures. A trusted advisor in challenging and time-sensitive situations, Ms. Harris regularly represents lenders and creditor constituencies in both consensual and contested restructurings, including prepackaged and prearranged Chapter 11 cases and out-of-court deleveraging transactions.
Mr. Kremer represents debtors, ad-hoc creditor groups, and individual creditors in a variety of distressed situations, including chapter 11 reorganizations, out-of-court debt restructurings, acquisitions of distressed companies, debtor-in-possession financings, and other corporate reorganizations. He has extensive experience in restructurings across a variety of industries, including retail, energy, exploration, transportation, and municipal debt restructurings.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, August 11, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Overview of DIP roll ups
II. Ratable sharing rights under prepetition credit agreements
III. Applicability of sharing rights to DIP roll ups
IV. Objections to non pro rata roll ups
V. Recent decisions
VI. Key takeaways
The panel will review these and other significant questions:
- What are the strategic benefits of roll ups, beyond securing repayment?
- What are the litigation lessons from American Tire, Serta, ConvergeOne, Anthology, and Del Monte?
- How have courts answered the allegation that LMTs in DIP facilities operate as sub rosa plans?
- How might the analysis change if a creditor declines to participate in the DIP financing?
