About the Course
Introduction
This CLE webinar will discuss the latest developments in liability management exercises (LMEs) based on recent litigation, including the latest federal district court decision in the ongoing Wesco Aircraft case. The panel will explore the importance of contractual language in debt instruments and provide drafting and structuring considerations for borrowers and lenders contemplating liability management or uptier transactions under the current legal landscape.
Description
LMEs continue to be the subject of intense debate and litigation. Recent decisions are shaping the future of LMEs, and these decisions highlight how courts interpret uptier and other LME transactions based on specific credit agreement terms. As courts continue to scrutinize LME structures, counsel must understand the lessons these cases provide lenders and borrowers for structuring and responding to liability management transactions (LMTs).
On Dec. 8, 2025, the U.S. District Court for the Southern District of Texas reversed the bankruptcy court's decision in Wesco and held that a pre-bankruptcy uptier transaction was permissible because it did not violate an indenture's sacred rights provision. Specifically, the court held that the uptier transaction did not require supermajority consent. Instead, the amendments or supplements that authorized additional notes required only simple-majority consent, and the court found that Wesco fully complied with its obligations.
The recent Wesco decision represents an important turning point in LME litigation in the context of the Fifth Circuit's other notable decision in Serta where the court held that the LME in that case violated the existing first-lien and second-lien credit agreements' pro rata sharing provisions. Wesco, Serta, and other recent LME decisions highlight the importance of contract language in credit agreements, and their holdings have the potential to significantly impact borrowers and lenders that have executed or are contemplating liability management exercises.
Listen as our authoritative panel reviews the key aspects of the noteholder litigation in Wesco and other pivotal cases and provides suggestions for structuring and drafting LMTs going forward.
Presented By
Mr. Morse represents banks, private debt funds, commercial finance companies, and other institutional lenders in structuring and documenting loan transactions, as well as loan workouts and restructurings. He has worked on numerous financing transactions confronting a wide range of legal issues raised by federal, state, and international laws. Mr. Morse is a frequent lecturer and author and is Founder and Co-Chair of the International Lending Conference held in London, sponsored by the Secured Finance Network, as well as serving as a moderator and panelist each year, and is a Member of the Executive Board of the Association of Commercial Finance Attorneys, among other professional activities.
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Mr. Zajac is a partner in Proskauer’s Global Finance Group and a member of the Firm’s Leveraged Finance team. He has extensive expertise and experience in leveraged finance, alternative capital and financial restructuring. Mr. represents financial institutions, investment funds, lenders and borrowers in leveraged finance, acquisition financings, first and second lien financings, syndicated credit facilities and debtor-in-possession (DIP) financings. His restructuring experience includes representing secured creditors, DIP lenders and acquirers of distressed businesses.
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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
Wednesday, April 1, 2026
- schedule
1:00 PM E.T.
I. Overview: current LME landscape and the contractual viability of uptier transactions
II. Latest federal district court decision in Wesco and other notable LME decisions
III. Implications of LME litigation on borrowers and lenders and the continued validity of uptier transactions and liability management exercises
IV. Structuring and drafting considerations in light of these decisions
V. Practitioner pointers and key takeaways
The panel will review these and other key considerations:
- What is the background, procedural history, and ruling in the Wesco case?
- What is the significance of the Wesco case, and how does this ruling differ from Serta and other decisions?
- What are the possible implications for borrowers and lenders contemplating uptier transactions or liability management exercises in light of these decisions?
- What are some key drafting and structuring considerations for credit facilities under the current legal landscape?
Related Courses
Structuring Liability Management Transactions: Sacred Rights Protections, Lessons From Wesco and Other Recent Decisions
Wednesday, April 1, 2026
1:00 PM E.T.
