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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

    Wednesday, September 13, 2023

  • 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 webinar will examine the different forms of exit financing available to chapter 11 debtors and certain structural and procedural issues associated with each. The discussion will include considerations regarding credit facilities, securities issuances, debt and equity rights offerings, best efforts vs. committed financings, material adverse effect provisions, factors implicating the requirements of section 1129 of the Bankruptcy Code, “new money” investments and the absolute priority rule, and other matters.

Faculty

Scott R. Bowling
Partner
Baker Botts LLP

Mr. Bowling is a partner in Baker Botts' Financial Restructuring group. His practice covers all aspects of domestic and cross-border corporate restructurings, distressed financings and acquisitions, credit and equity investments, liability management transactions, crisis management, and other special situations. Mr. Bowling represents debtors, creditors, sponsors, DIP lenders, bidders, and other parties in out-of court workouts, chapter 11 cases, liquidations, and other distress-related matters. His experience extends to a wide range of sectors including oil & gas, financial services, energy, retail, technology, media, telecommunications, pharmaceuticals, industrials, and casino gaming.

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Caitlin Lawrence
Partner
Baker Botts LLP

Ms. Lawrence advises publicly and privately held corporate borrowers and issuers, private equity funds, credit funds, mezzanine funds and commercial banks in commercial lending, direct lending and other complex financial transactions. Her experience includes syndicated loans, reserve-based and asset-based facilities, sustainability-linked facilities, acquisition financings, mezzanine facilities, direct lending, restructurings and other structured financings. Ms. Lawrence represents clients in a variety of industries, including energy, manufacturing, media and infrastructure. Her energy industry experience includes matters involving oil and gas exploration and production, midstream, oilfield services, distribution, storage and transportation, clean energy, sustainability and retail.

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Description

Exit financing is one of the keys to success for any plan of reorganization, providing liquidity for required distributions, refinancing existing indebtedness, and funding the go-forward business. Exit financing has become increasingly complex and today presents issues that may bear on numerous aspects of a company’s ability to confirm a chapter 11 plan and emerge from bankruptcy.

In addition to the negotiation of the normal aspects of a company’s financing, such as economic terms, covenants, debt priority, and the scope of a collateral package, exit financing involves additional considerations under the Bankruptcy Code. Those include (among other things) proving that a chapter 11 plan is “feasible,” that it has been proposed in good faith, and that it provides equal treatment among holders of claims within each class.

Listen as our authoritative panel discusses these and other key considerations related to debt and equity exit financing strategies. The panel will discuss the pros and cons of various types of debt and equity financing and the critical risks and considerations associated with each.

Outline

  1. Exit financing as an integral part of a chapter 11 plan
  2. Exit financing marketing and approval process
  3. Common structures
    1. Credit facilities
    2. Bond issuances
    3. Equity and debt rights offerings
    4. Direct equity investment
  4. Feasibility
    1. Cash flow projections
    2. "Best efforts" vs. committed financing
    3. Closing conditions and execution risk
  5. Absolute priority rule
    1. The absolute priority rule in general
    2. Bank of America v. LaSalle and the “new value” corollary
    3. Implications for existing equity holders
  6. Equal treatment
    1. Section 1123(a)(4) of the Bankruptcy Code in general
    2. Rights offerings and implications for equal treatment
  7. Securities law exemptions, public vs. private companies, and other key considerations

Benefits

Participants will take away a nuanced, current understanding of key considerations for chapter 11 exit financings and the ability to analyze and evaluate exit financing strategic considerations.