DIP Financing: Structuring Roll-Overs, Cross-Collateralization, Priming Liens, Junior DIP Financing, and More

Recording of a 90-minute CLE video webinar with Q&A

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Conducted on Wednesday, August 4, 2021

Recorded event now available

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This CLE course will discuss challenging issues in debtor-in-possession (DIP) financing that are most often the subject of contentious negotiations between DIP lenders and other secured creditors, as well as the subject of intense scrutiny by bankruptcy judges.

Description

DIP financing is often subject to an evolving list of conditions by lenders to limit the risks of post-petition financing. Challenging terms include roll-overs and roll-ups, cross-collateralization, priming liens, and super-priority claims on avoidance actions. Pre-petition lenders often seek releases from the debtor regarding the validity, priority, and amount of the pre-petition claims and a release of defenses. Other terms include carve-outs, liens on avoidance actions, Section 506(c) waivers, and waiver of the automatic stay.

This panel will also discuss the seemingly ever-present issues relating to the relative rights of senior creditors vs. junior creditors, including the evolution of case law addressing the enforceability and the impact of intercreditor agreement provisions that make it difficult for junior secured creditors to offer competing DIP financing. Courts are mindful of secured creditor overreach and may be more willing to question lender demands.

Listen as our authoritative panel of bankruptcy practitioners offers guidance on these issues, takes a look at current case law, and provides practice tips for counsel that represent DIP lenders, other secured lenders, and debtors.

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Outline

  1. Rollover of pre-petition secured debt
  2. Cross-collateralization
  3. Priming liens
  4. Liens or super-priority claims on avoidance actions
  5. Releases and waivers of challenges to liens and other future borrowings
  6. Section 506(c) waivers
  7. Junior DIP financing
  8. "Carve-out" for professional fees
  9. ABI Commission recommendations for reforms impacting DIP financing

Benefits

The panel will review these and other key issues:

  • What must counsel consider in evaluating defensive vs. offensive DIP loans?
  • How does the debtor seeking a priming lien convince the existing lender to consent or convince the court that the current lender's lien is adequately protected?
  • How do bankruptcy courts treat releases of pre-petition secured lenders?

Faculty

Anderson, Eric
Eric W. Anderson
Partner
Parker Hudson Rainer & Dobbs

Mr. Anderson concentrates his practice in bankruptcy, workouts, financial restructuring and commercial finance. He...  |  Read More

Lipke, Douglas
Douglas J. Lipke
Shareholder
Vedder Price

Mr. Lipke is Co-Chair of the firm’s Insolvency, Bankruptcy and Corporate Reorganization Group. He concentrates...  |  Read More

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