Fraudulent Conveyance Exposure for Intercorporate Guaranties, Integrated Transactions, and Designated-Use Loans

Contours of Section 548 Reasonably Equivalent Value Defense in Complex Lending Transactions

A live 90-minute CLE video webinar with interactive Q&A


Wednesday, January 12, 2022

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, December 17, 2021

or call 1-800-926-7926

This CLE course will provide finance and bankruptcy counsel with a review of the legal and economic issues in fraudulent conveyance avoidance actions for intercorporate guaranties, integrated transactions, and designated-use loans. The program will discuss how these transactions are at risk of being voided for lacking reasonably equivalent value and how lenders can show that indirect economic value from the transaction satisfies Section 548.

Description

Intercorporate guaranties are commonly found in many financing deals, such as upstream, downstream, and cross-stream guaranties. Enforcement of guaranty obligations presents a risk the guaranty may be avoided for lack of consideration or as a fraudulent conveyance if the guarantor becomes a debtor in a bankruptcy case.

Also, when loan proceeds are designated for a specific use, as is often the case in leveraged buyouts, the borrower generally lacks control over the loaned funds. Thus, if the loan is challenged as a fraudulent transfer, then to establish the borrower received reasonably equivalent value from the loan, the lender often must show the borrower received other economic value from the loan transaction.

Bankruptcy Code Section 548's (or analogous state law’s) reasonably equivalent value inquiry provides a court some discretion in applying the rules and standards to the facts of the transaction.

Listen as our authoritative panel of finance practitioners and litigators discusses the inherent risks in intercompany obligations of fraudulent conveyance avoidance actions, along with compelling arguments for the lender to establish economic value to the transaction to satisfy Section 548.

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Outline

  1. Overview of types intercompany guaranties and integrated transactions at risk
  2. Fraudulent transfer analysis
    1. Timing of guaranty
    2. Reasonably equivalent value
    3. Financial condition of the guarantor
  3. Loans supported by intercorporate guaranties
  4. Integrated transactions and designated-use loans
  5. Best practices for lenders to establish a reasonably equivalent value

Benefits

The panel will review these and other key issues:

  • How do courts interpret "reasonably equivalent" value and will they consider indirect, intangible value?
  • How have courts applied the single integrated transaction doctrine and what kinds of transactions are at risk for courts collapsing the transactions?
  • What steps can lenders take to minimize insolvency related risks inherent in intercompany guaranties and other complex lending transactions?

Faculty

Bonsall, Lisa
Lisa S. Bonsall

Partner
McCarter & English

She practices in diverse areas of litigation, focusing on commercial litigation and bankruptcy. She represents secured...  |  Read More

Kaplan, Michael
Michael A. Kaplan

Partner
Lowenstein Sandler

Mr. Kaplan represents clients in high-stakes litigation and appeals in federal and state courts throughout the country,...  |  Read More

Lipkin, Alan
Alan J. Lipkin

Partner
Chaffetz Lindsey

Mr. Lipkin regularly advises debtors, committees or groups of creditors, noteholders, and equity holders, major...  |  Read More

Attend on January 12

Early Discount (through 12/17/21)

Cannot Attend January 12?

Early Discount (through 12/17/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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