Loan-To-Own Deals Tricky, But Not Impossible: Attys

Law360, New York (October 22, 2009, 2:01 PM EDT) -- Doing deals in bankruptcy court these days frequently entails elements of a so-called loan-to-own strategy, in which an investor makes a play for a debtor by buying into existing debt or extending Chapter 11 financing, and while those arrangements are likely to face objections, there are tactics that can help ensure they work, attorneys say.

Loosely defined, “loan-to-own” refers to a practice by which a lender extends credit, or buys existing debt holdings, with the aim to take over underlying assets, restructuring attorneys said.

The concept...
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