Category: Legal

The Priority of Federal Tax Liens; A Commercial Lender’s Perspective

People often assume that federal law takes precedence over state law, and, in many cases, it does. However, when it comes to perfecting securities under the UCC, federal law preserves the priorities established by states. Stephen Brodie and Tzvi Weisz examine the interplay between security interests under the UCC and federal tax liens.

The Jevic Case: High Court Rejects Deviations to Chapter 11 Structured Dismissals

In March, the U.S. Supreme Court overruled the decision of three lower courts by determining the Bankruptcy Code does not permit “priority skipping” in Chapter 11 structured cases. Kurt Mayr and Shannon Wolf examine the pivotal Czyzewski v. Jevic Holding case and explain the implications for future structured dismissals in Chapter 11 cases.

Understanding Agreements Among Lenders: How the Unitranche Differs From an Intercreditor Agreement

Unitranche facilities are growing in popularity. They require less paperwork, so borrowers find them more economical and quicker to close. The unitranche is an agreement among lenders without the framework of the UCC or the Bankruptcy Code. Blank Rome’s Danielle Garcia and Alyssa Keon explain how unitranche facilities differ from intercreditor agreements and point out ways to create a more effective agreement among lenders.

Blocking Rights in LLC Operating Agreements: Do These Provisions Help Lenders?

Traditionally, secured lenders have utilized blocking rights to prevent a limited liability company from filing for bankruptcy before the lenders have recovered the debt. Nancy Peterman explains that two recent court decisions have made it more difficult for lenders to use blocking rights without taking the rights of other stakeholders into account.

What’s in Your Intercreditor Agreement? For First Lien Lenders, the Devil’s in the Details

For many years, bankruptcy courts failed to enforce intercreditor agreements because the parties involved were not in bankruptcy. Courts today are enforcing these agreements strictly according to their text. Failure to note the precise wording of an intercreditor agreement can trip up a first lien lender and give the second lien lender the upper hand during bankruptcy proceedings.