Structured Preferred Equity: Documentation, Protective Covenants, Tax Treatment, Use in Debt Restructuring
Note: CPE credit is not offered on this program
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE webinar will examine the structuring and documentation of preferred equity investments in private companies. The panel will discuss protective covenants and the distinctions between preferred equity and debt, terms issuers and investors should consider to ensure equity treatment, and preferred equity as both a new money financing instrument and debt restructuring tool.
- Preferred equity: key features
- Straddling the line between debt and equity
- No maturity date: lack of control over exit
- Limited enforcement rights
- Subordinate to company debt and subsidiary equity
- Protective covenants
- Tax treatment: phantom income
- Preferred equity as a debt restructuring tool
The panel will review these and other important issues:
- How does preferred equity differ from traditional debt, and when is it a desirable alternative?
- What protective covenants are typically included in preferred equity documents?
- Can the dividend and repayment terms be structured to avoid phantom income?
- What are the potential uses of preferred equity in restructuring company debt?
David M. Hillman
Mr. Hillman is co-head of the Private Credit Restructuring Group and a member of the Business Solutions,... | Read More
Mr. Hillman is co-head of the Private Credit Restructuring Group and a member of the Business Solutions, Governance, Restructuring & Bankruptcy Group. He has 24 years of experience with an emphasis on representing private credit lenders, private funds, sovereign wealth funds, and other alternative lenders and distressed investors in special situations and restructurings both in and out-of-court, whether the lender is secured or unsecured, unitranche or structured preferred. He has substantial experience in every phase of restructuring and distressed investing, including credit bid sales under section 363, debt-for-equity swaps, chapter 11 plans, out of court restructurings, foreclosures, and navigating inter-creditor issues involving the relative rights of majority and minority lenders. He also litigates the issues facing private credit lenders, including issues involving plan confirmation, solvency, valuation, inter-creditor disputes, financing, and cash collateral disputes, fraudulent transfers, equitable subordination, recharacterization, breach of fiduciary duty and similar disputes.Close
Steven M. Peck
Mr. Peck is a partner in the Corporate Department and member of the firm’s Private Equity and Mergers &... | Read More
Mr. Peck is a partner in the Corporate Department and member of the firm’s Private Equity and Mergers & Acquisitions Group and its Structured Private Capital Group. He represents sophisticated private investment funds, multi-national corporations and other market participants in their most challenging transactional matters.Close
Early Discount (through 08/27/21)
Cannot Attend September 22?
Early Discount (through 08/27/21)
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 program handouts.