When Elephants Fight: Participant Lender Disputes

Law360, New York (March 19, 2010, 1:03 PM EDT) -- In distressed debt situations, normally one thinks of the debtor as being in distress. Yet, now it frequently is the lending group that is in “distress.” This is a relatively new phenomenon. While disputes within a lender group were not unheard of, those disputes usually did not become public and impact case outcomes. No more.

In the current economy, loan participations[1] are now resulting in contentious disagreements among the participants, frequently spilling over into dealings with the debtor and creating dilemmas for both debtors’ and lenders’...
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