Print PDF "Denial of Consents to Secondary Loan Assignments on the Rise" by Paul B. Haskel and Neil Binder
October 4, 2010In recent months, a substantial number of assignments of syndicated bank loans have been thwarted because either the borrower or agent has refused to consent to such assignment. Such refusals have occurred, for instance, where a potential lender is a hedge fund or where a potential lender refuses to commit to a proposed restructuring. As a result, lenders seeking to sell their loans have started to question whether such refusals to provide consent are "reasonable," as is typically required under syndicated loan credit agreements. In this memorandum, our partners Paul B. Haskel and Neil S. Binder address the consent to assignment requirements in credit agreements, issues raised by the increasing number of consent denials, and the legal framework that might be used to analyze a challenge to such denials.