When Rights Offerings Go Wrong

Law360, New York (June 14, 2011, 3:47 PM EDT) -- Exit financing is a valuable and essential tool for debtors, particularly in today’s financial markets where debtors are often challenged to develop a viable exit financing plan. As described in “The Latest in Exit Financing” Law360 (May 19, 2011), professionals and debtors are developing creative financing products that assist a debtor in implementing a successful and timely exit from Chapter 11.

However, debtors also continue to use traditional tools, such as rights offerings, to obtain exit financing. After the credit market implosion, rights offerings became prevalent...
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