Special Situations

Each situation requires different skill sets and different approaches. We analyze each new matter and assemble a team with the right experience to deliver the knowledge and capabilities required to achieve client objectives.

Our team works together – across practice groups – every day on distressed situations. So, as transactions evolve, we have the flexibility to quickly reallocate resources and add capability as needed.

Restructuring

As more restructurings move out of court, the ability of advisers to provide the full suite of restructuring advice – not just bankruptcy law, but mergers and acquisitions, securities and finance knowledge – becomes critical.  Schulte’s team – for decades – has worked together in a coordinated fashion to deliver private capital clients with critical restructuring advice before matters ever get to bankruptcy. 

We know the full range of critical out-of-court options and how to balance them with potential in-court options.  We have experience in:

• Debt and equity exchanges (including coercive exchanges)
• Maturity extensions
• Forbearance and amendments
• Negotiating restructuring support agreements
• Pre-negotiated bankruptcies
• UCC foreclosures and other state law remedies
• Change of control transactions
• Liability management transactions
• Recovery, repossession and liquidation of inventory, accounts, stock, negotiable instruments, and other personal property through public or private sale

Finance-Driven Solutions

Schulte is a leader in direct lending middle-market debt transactions. Our daily experience representing top-tier funds and other alternative lenders allows our Special Situations Group to efficiently navigate complicated debt structures and intercreditor arrangements. Our experience includes:

• Distressed lending, including DIP and super-priority facilities
• Refinancings
• Holdco and mezzanine financings
• Convertible debt, preferred equity and other equity-like financings
• ABL facilities
• 1st/2nd lien and unitranche financings
• Leveraged buyouts and add-on acquisitions
• Working capital facilities
• Bridge loan financings
• Dividends and recapitalizations
• Capital call and subscription facilities
• Warehouse and NAV facilities
• Esoteric asset-backed facilities

Distressed M&A

We represent private equity funds, hedge funds and other institutional investors in their distressed merger and acquisition activities, including section 363 sales (whether as a “stalking horse bidder” or as an auction participant) and acquisitions through sponsored or stand-alone reorganization plans. When liquidity is scarce, we help investors craft and implement alternative investment and financing tactics, including “loan-to-own” strategies like using senior debt claims to credit bid on distressed assets or existing debt securities to confirm a plan of reorganization and emerge with equity. Our interdisciplinary approach enables us to help clients effectively navigate the unique structuring, strategic, diligence, finance and documentation issues that arise in special situations M&A transactions.

Bankruptcy

Schulte represents key players in many of the most significant in-court bankruptcy matters in the market. We serve as a strong and experienced advocate for direct lenders, DIP and exit lenders, syndicated lender and bond groups, indenture trustees and bondholders. No matter how complex the proceedings, we help clients identify and adhere to the distinct regulations and timeframes that apply in formal bankruptcy proceedings — protecting their rights and maximizing recoveries. Having participated in all transactional and litigation aspects of in-court restructurings, we bring a broad perspective to the issues facing our clients. Our understanding of the risks and opportunities associated with distressed situations allows us to take the lead in structuring, negotiating and managing financing transactions in bankruptcy cases, including debtor-in-possession financings and exit facilities implemented through Chapter 11 plans of reorganization.

State and Federal Litigation

We draw on our bankruptcy court knowledge, deep trial experience, understanding of the fund industry and business acumen to negotiate successful resolutions to special situations disputes or, when necessary, try them to judgment. Our track record in resolving disputes has attracted a strong client base, including private funds, public and private companies, officers and directors, investment banking firms, commercial banks, investment advisers, accounting firms, insurance companies, law firms, public interest organizations and partnerships and individuals. Our experience includes:

• Litigating valuation, contested DIP and plan hearings and avoidance actions to successful completion
• Prosecuting and defending recharacterization and subordination claims
• Advising with respect to defense of proof of claims and other key creditor issues in bankruptcy
• Advising and defending directors, officers and equity holders with respect to their duties as fiduciaries of a distressed company

Distressed Debt Investing

We advise broker-dealers, hedge funds, investment banks, CLOs and private equity funds on a range of U.S., European, and emerging-market debt and claims trading matters. We advise clients in structuring, preparing and negotiating deal-specific transaction documentation, including:

• "Big boy" letters
• Claim assignment agreements
• Confidentiality agreements
• Distressed and par loan purchase and sale agreements
• Proceeds letters
• Trade confirmations
• Bid documentation in connection with debt auctions
• Collateral annexes
• Debt and claim participation and sub-participation agreements
• Netting letters
• Purchase agreements for the sale of private debt securities

We often play a central role in transactions with a trading component while working closely with the firm’s other practice groups.