DIP Financing: Structuring Roll-Overs, Cross-Collateralization, Priming Liens, Junior DIP Financing, and More

This CLE course will discuss challenging issues in debtor-in-possession (DIP) financing that are most often the subject of contentious negotiations between DIP lenders and other secured creditors, as well as the subject of intense scrutiny by bankruptcy judges.

DIP financing is often subject to an evolving list of conditions by lenders to limit the risks of post-petition financing. Challenging terms include roll-overs and roll-ups, cross-collateralization, priming liens, and super-priority claims on avoidance actions. Pre-petition lenders often seek releases from the debtor regarding the validity, priority, and amount of the pre-petition claims and a release of defenses. Other terms include carve-outs, liens on avoidance actions, Section 506(c) waivers, and waiver of the automatic stay.

This panel will also discuss the seemingly ever-present issues relating to the relative rights of senior creditors vs. junior creditors, including the evolution of case law addressing the enforceability and the impact of intercreditor agreement provisions that make it difficult for junior secured creditors to offer competing DIP financing. Courts are mindful of secured creditor overreach and may be more willing to question lender demands.

Listen as our authoritative panel of bankruptcy practitioners offers guidance on these issues, takes a look at current case law, and provides practice tips for counsel that represent DIP lenders, other secured lenders, and debtors.