An article by Member Kaitlin Walsh and Of Counsel Timothy McKeon was published in the Journal of Bankruptcy Law, examining and comparing two court decisions that challenge non-pro rata uptier transactions. These deals can change the order in which creditors are repaid, occasionally without full lender approval, leading to growing legal scrutiny.

"Judicial interpretation of these transactions is controversial and quickly evolving,” the authors write. “In light of these rulings, borrowers and lenders alike may wish to consider adding a definition of ‘open market purchase’ to their credit agreements or otherwise provide for clearly stated exception language.”

Source

Pratt's Journal of Bankruptcy Law