and the Role of the Agent Navigating Divergent Interest of Lenders, - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Syndicated Credit Facility Restructuring and Workouts: Lender Strategy, Decision-Making and the Role of the Agent Navigating Divergent Interest of Lenders, Confidentiality Among Lenders, Avoidance of Privilege Waivers and More TUESDAY, AUGUST 2, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Alison R. Manzer, Partner, Cassels Brock & Blackwell , Toronto James C. Schulwolf, Partner, Shipman & Goodwin , Hartford, Conn. Jeffrey A. Wurst, Partner, Ruskin Moscou Faltischek , Uniondale, N.Y . The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Syndicated Credit Facility Restructuring and Workouts: Lender Strategy, Decision-Making and the Role of the Agent Navigating Divergent Interest of Lenders, Confidentiality Among Lenders, Avoidance of Privilege Waivers and More August 2, 2016 5

Speakers Alison R. Manzer James C. Schulwolf Jeffrey A. Wurst Cassels Brock & Blackwell Shipman & Goodwin LLP Ruskin Moscou Faltischek, P.C. amanzer@casselsbrock.com jschulwolf@goodwin.com jwurst@rmfpc.com 6

Who are the Lenders and How do Their Interests Diverge ? ● Types of Lenders a) Banks, Mezzanine Funds, Hedge Funds, etc. b) Revolving Lenders, Term Lenders, and Equipment Lenders c) Sellers, Bondholders, and Government Agencies ● Different Motivations a) Getting Your Money Back b) Trading/Arbitrage c) Loan-to-Own d) Keeping the Borrower Alive? 7

Who are the Lenders and How do Their Interests Diverge ? ● Different Regulatory (or Non-Regulated) Regimes a) Capital/Reserve Requirements and Risk Ratings b) Unregulated Entities 8

Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong Exculpatory Provisions – Do/Should They Hold Up ● What The Standard Terms Say a) no duty or obligation except explicit b) no discretionary action c) no duty to disclosure ● The Restructuring Issues a) need for increased monitoring, credit b) need for speed and managing conflict c) increased reliance ● Revisions That Address include “troubled” loan clause a) b) revise voting levels c) increase responsibility, increase cover d) improve reporting 9

Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong Defaulting Lenders – Preventing Obstruction 1. What The Standard Terms Say a) can be replaced b) payment required - outstanding balance c) no sanction otherwise ● The Restructuring Issues a) can try to use to exit b) can cause funding (protective) advance issues ● Revisions That Address a) right to call for advance, make a default claim b) penalty buyout (discount) c) prohibit transfer d) subordinate on payment, no vote 10

Key Terms of the Syndicated Loan Agreement – What Matters When It Goes Wrong Agent Responsibilities ● What The Standard Terms Say a) nothing specific, no change for restructuring period b) ability to delegate c) ability to resign ● The Restructuring Issues a) speed of decision making b) need for further funds c) concern for expertise and continuity ● Revisions That Address ● a) ability to change for expertise ● b) increase agents fees ● c) improved discretion rights, protection 11

Voting Rights ● Basics a) Required Lenders Generally i) Generally ii) By Loan Type b) Sacred Rights ● Ensuring Voting and Approvals are Effective in Managing a Restructuring a) Counting Heads, Lining up Needed Votes b) Clear Directions to Agent c) Agent Discretion d) Avoiding the Squeaky Wheel 12

Voting Rights ● Variations Needed for Troubled Loan Circumstances a) Yank-a-Bank and How to Document for It b) Ability of Required Lenders of One Loan Type to Make Decisions 13

Common Interest Agreement ● Joint Representation Confidentiality and Attorney-Client Privilege ● Negotiating Agreements ● Accidental Privilege Waivers ● Maintaining Confidentiality ● Working Together Toward a Common Goal 14

Complexities Practical Effects of Divergent Interests (When It Goes Bad) 1. dump and run – or - work it out 2. protective advances – or – good after bad 3. other relationships – or – this is it 4. love the industry – or – hate the industry 5. portfolio in trouble – or – just a “blip” 15

Complexities Arrival of New Lenders (Credit Trading, Sloppy Exit) 1. generally allowed at any stage, consent 2. borrower consent falls away, does agent/lender 3. divergent purposes – need to understand 4. preserving right to exit 5. need a basis for control 6. consider strategic competitors 16

Role of Agent and Inherent Risks ● Communications Can Be Dangerous in A restructuring ● What can, should, or must be disclosed ● Second-Guessing by Co-Lenders – How Do You Control ● To act or not to act – Consensus or Disarray 17

Lessons from GM 18

Speakers Alison R. Manzer James C. Schulwolf Jeffrey A. Wurst Cassels Brock & Blackwell Shipman & Goodwin LLP Ruskin Moscou Faltischek, P.C. amanzer@casselsbrock.com jschulwolf@goodwin.com jwurst@rmfpc.com 19