USA Trends and Developments Contributed by: Meyer C. Dworkin, James A. Florack, Vanessa L. Jackson and Kenneth J. Steinberg, Davis Polk & Wardwell LLP
While potential methods for lenders to foreclose each of the issues referred to in the article exist – mate- rially tightening investment capacity in unrestricted and non-guarantor restricted subsidiaries; requiring an “all affected” lender consent to subordinate pay- ment or collateral rights for senior secured term loans; restricting unrestricted subsidiaries’ liens on, guaran- tees from and direct and indirect claims against the loan party group and prohibiting non-pro rata loan purchases – the creativity of market participants in structuring these transactions and the negotiation between borrowers and lenders on appropriate pro- tections and flexibility will, without doubt, continue in the years to come.
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