Distressed Debt
RK&O has had a strong presence in the market for the purchase and sale of par and distressed bank loans and other financial claims against troubled or insolvent companies since its inception. It is recognized internationally as a leader in industry developments and legal practices. By representing many of the original investors in distressed bank loans in the early 1990's, the Firm helped create the documentation, standards and customs that were later adopted by the entire secondary loan trading marketplace. The Firm’s many years of experience representing hedge funds, investment banks, CLO’s, banks and other financial institutions in all aspects of loan and claims trading gives our lawyers a valuable and unique understanding of the legal issues and commercial complexities that underpin the market.
Debt trading remains a key focus of the Firm’s corporate practice, which is regarded as having one of the world’s largest and most experienced teams dedicated to the secondary debt market. Market conditions are such that our clients demand an efficient and focused response. We set ourselves apart from other firms in our ability to provide a dedicated team of debt trading lawyers and legal assistants who can quickly grasp new market challenges. This gives our clients the advantage of fast execution, avoiding costly and time-consuming delays. The Firm’s established presence in the debt trading legal community in both New York and London enables us to provide a responsive, real-time service to clients operating across multiple time zones and jurisdictions. We have developed a large number of strong relationships with highly skilled local counsel in numerous jurisdictions to help guide our clients through the myriad of issues that arise in transactions of this nature.
Unlike many of our competitors in this practice area, RK&O has a wealth of expertise in corporate practice areas related to the distressed debt practice such as lending, bankruptcy, credit derivatives, restructuring, litigation and private equity. The Firm’s lawyers in the debt trading group have a strong familiarity with each of these areas and work closely with their colleagues to ensure that clients receive the guidance and perspective required by investors in this market. The Firm is able to apply this expertise to all stages and levels of debt trading transactions. We assist clients throughout the entire transaction process from the initial due diligence of the borrower and, if applicable, its insolvency case, the review of credit documentation, the structuring of the transaction and right through the negotiation of deal specific purchase documentation. The Firm also has extensive experience in tax and ERISA issues that arise in acquiring and holding debt and claims (including withholding tax considerations in cross-border transactions). In addition, our international presence gives us valuable insights into the different regulatory and accounting regimes applicable to investing in debt in multiple jurisdictions. Investing in bank debt can also raise numerous difficulties and complex issues in the securities compliance area. The Firm’s debt trading lawyers work closely with the Firm’s Securities Regulatory and Trading Advice group to provide real-time, in-depth regulatory and compliance advice to the Firm’s debt trading clients.
In the course of representing market participants, the Firm also provides legal advice on the analysis of claims, the regulatory implications of specific purchase and sale transactions, and the implementation of effective strategies to influence or control subsequent restructurings, reorganizations, bankruptcies and related litigation. The Firm advises clients in connection with all stages of a debt transaction including the preparation and negotiation of confidentiality agreements, bank loan "big boy" letters, trade confirmations, distressed and par bank loan purchase and sale agreements, claim assignment agreements, participation and subparticipation agreements, netting letters, proceeds letter and purchase agreements for the sale of private debt securities. RK&O lawyers work closely with their clients to advance the client’s goals in an expedited and efficient manner.
The Firm regularly advises market authorities and industry-wide groups on market practices and documentation used in secondary market transactions and is an active member of The Loan Syndications and Trading Association (LSTA) and The Loan Market Association (LMA). The Firm’s lawyers understand the critical need for liquidity and marketability and are therefore committed to developing the standard form documents used by the market to ensure they reflect market developments. We also understand that, in the ever more complex and international market, standard documents are not always adequate to deal with the risk and economic issues associated with such transactions. In such cases, we are well versed at providing unique and creative solutions to difficult problems and our lawyers are often called on to head up industry groups and to speak at market conferences.
