Fraudulent Conveyance Actions: Responding to TOUSA III

Lessons for Lenders in Financing Transactions With Distressed Companies

Eleventh Circuit deals blow to secured lenders in TOUSA III

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

Conducted on Wednesday, July 11, 2012

Recorded event now available

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Program Materials

This CLE webinar will provide bankruptcy attorneys with an analysis of the most recent 11th Circuit TOUSA ruling, discuss the impact of the ruling on practices of commercial lenders and other market participants, and outline best practices for secured lenders dealing with distressed companies.

Description

The 11th Circuit Court of Appeal’s recent TOUSA III ruling dealt a blow to lenders' ability to get repaid by distressed borrowers. The court reversed the district court and affirmed the bankruptcy court’s original decision that the TOUSA subsidiaries did not receive reasonably equivalent value for paying the loan obligation of their parent, and that the lenders who received such payments were liable for fraudulent conveyance.

While a victory for unsecured creditors, there are a number of issues in the case that were not subject to this appeal and thus remain to be decided. There are lessons for lenders from this protracted case.

Practitioners must be well versed on the ramifications of the TOUSA developments on rescue financings, liens on subsidiary assets, and the future of fraudulent conveyance suits.

Listen as our authoritative panel discusses the 11th Circuit’s ruling in TOUSA III and its impact on rescue finance transactions, loan documentation, and the future of fraudulent transfer litigation.

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Outline

  1. Overview of TOUSA III ruling
    1. Reasonably equivalent value
    2. Savings clauses
    3. Revolving credit facilities
  2. Impact of rulings, evaluating future liabilities and mitigating impact
    1. Commercial lenders
    2. Commercial borrowers
    3. Secondary loan market participants
  3. Lessons for secured lenders

Benefits

The panel will review these and other key questions:

  • What challenges and pitfalls remain for lenders to distressed companies after the recent TOUSA ruling?
  • What does this decision teach about reasonably equivalent value particularly as it relates to subsidiaries paying obligations of their parent?
  • What level of due diligence is required of lenders to a financially distressed borrower concerning the source of funds used to satisfy the loan?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Thomas J. Hall
Thomas J. Hall
Partner
Chadbourne & Parke

Mr. Hall is Co-Head of the firm’s Commercial Litigation Practice and has extensive experience in complex...  |  Read More

Thomas J. McCormack
Thomas J. McCormack
Partner
Chadbourne & Parke

He is a trial lawyer with over 25 years of experience handling complex commercial, securities and class action...  |  Read More

Seven Rivera
Seven Rivera
Partner
Chadbourne & Parke

Mr. Rivera's practice involves all aspects of bankruptcy and restructuring representing both secured and unsecured...  |  Read More

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