USA Law and Practice Contributed by: Stelios Saffos, Dan Seale, Peter Sluka and Alfred Xue, Latham & Watkins
7.10 Expedited Restructurings Pre-arranged and pre-packaged plans are avail - able in the United States. A true pre-packaged plan, in which votes are solicited and received pre-filing, is the most expedited type of bank - ruptcy and there are precedents for these bank - ruptcies lasting a very short time (less than one week). A pre-arranged case can be somewhat faster than a freefall bankruptcy but is not as fast as a pre-packaged case. 8. Case Studies and Practical Insights 8.1 Notable Case Studies In 2024, one of the more notable restructurings in the private credit space was the Pluralsight restructuring. Even though Pluralsight did not file for bankruptcy, it was widely reported that the private equity sponsor transferred intellectual property to a non-guarantor restricted subsidi - ary, loaning money to that entity on a structurally senior basis. This made news because it was viewed as “liability management” coming to pri - vate credit. The private equity sponsor ultimately unwound the transaction and consummated a more traditional debt-for-equity out-of-court restructuring.
8.2 Lessons Learned Private credit is not immune to liability manage - ment transactions. 8.3 Application of Insights While private equity sponsors will need to care - fully determine whether to consummate a liabil - ity management transaction without the consent of their secured lenders, the threat has become more credible and could be used as leverage in more traditional workout negotiations.
347 CHAMBERS.COM
Powered by FlippingBook