Default Remedies Under Subscription Credit Facilities: Pre-Enforcement Strategies, Capital Calls, UCC Foreclosure
A live 90-minute premium CLE webinar with interactive Q&A
This CLE webinar will discuss the exercise of remedies available to secured lenders under subscription credit facilities in an event of default by the fund manager or investors. The panel will discuss suggested actions to take at the pre-enforcement stage, the options available in exercising capital calls and other remedies, and pitfalls to avoid.
- Subscription credit facilities--key parties, what constitutes a default
- Pre-enforcement stage
- Confirm UCC filings are valid and refresh lien searches
- Deliver investor notices
- Review and deliver notices under an account control agreement
- Capital call on investor portal
- Review all existing defaults under the subscription facility
- Calculate outstanding obligations
- Consider restructure of the subscription facility documentation
- Enforcement stage
- Charge default interest, if available
- Suspend the availability of LIBOR loans
- Take control over the collateral account
- Notify investors of the default
- Make a capital call--alternative methods
- If necessary, enforce remedies outlined in the fund's governing document
- Terminate the revolving commitments
- Accelerate the maturity date and declare all obligations due and payable
- Apply the enforcement proceeds according to subscription facility documentation
- UCC foreclosure
The panel will review these and other critical issues:
- What are the first steps a lender should take when a subscription facility default has occurred?
- When might a restructuring of the facility be appropriate as opposed to exercising other remedies?
- What is the process for taking control of the cash collateral account? Under what circumstances should a new account be opened?
- What are the different methods for exercising a capital call?
- What are other remedies available to the lender in the event of default?
Mr. Deveau is a banking and finance partner with Reed Smith in London. He advises clients on a broad range of domestic... | Read More
Mr. Deveau is a banking and finance partner with Reed Smith in London. He advises clients on a broad range of domestic and cross-border debt finance transactions, including fund finance, acquisition finance, real estate finance, project finance, general corporate lending, and restructuring.Close
Ms. Jones acts for banks and other financial institutions, sponsors, general partners and fund managers on a range of... | Read More
Ms. Jones acts for banks and other financial institutions, sponsors, general partners and fund managers on a range of fund finance matters including capital call facilities, NAV and asset backed facilities, general partner facilities and co-investment facilities.Close
Partner, European Head of Funds Finance
Mr. Stephenson is a member of the Financial Industry Group and Head of Funds Financing in London. He and his team work... | Read More
Mr. Stephenson is a member of the Financial Industry Group and Head of Funds Financing in London. He and his team work with banks, other financial institutional lenders, Managers, General Partners and Limited Partners of funds on specialist financing transactions with private equity, secondaries, real estate, direct lending and infrastructure funds. His Firm has one of the market leading funds finance practices acting for lenders and funds in the European, US, Asian and Middle Eastern markets. He has particular specialist knowledge of NAV/Asset Backed and Hybrid facilities, capital call facilities, co-investment and GP/Manager support facilities and other types of liquidity facilities provided to funds. He represents a large proportion of lenders that provide fund financing and has just won the award of partner of the year for Banking at the Client Choice Awards 2017.Close
Elizabeth R. Tabas Carson
Ms. Tabas Carson is a partner in the firm's Financial Services Group. Experienced in a wide range of U.S. and... | Read More
Ms. Tabas Carson is a partner in the firm's Financial Services Group. Experienced in a wide range of U.S. and English law banking and transactional finance matters, she concentrates her practice on banking and financing transactions including domestic and cross-border leveraged acquisition financings, fund financings, dividend recapitalizations, working capital financings, restructurings and other distressed transactions.Close
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