Anne Beaumont Speaks to Octus About Strategies for LME Holdouts

In a July 23 Octus article titled, “Saying No:  The Power and Peril of the LME Holdout,” litigation partner Anne E. Beaumont spoke with the credit intelligence platform about strategies for investors faced with the choice of participating in non-pro-rata liability management exercises or holding out for better recoveries on their loans in the face of opposition from distressed borrowers, sponsors, and creditor in-groups. Anne spoke about holdouts needing “backbone” to deal with an ever-expanding arsenal of strategies to scare investors and force them to accept options that mean less-than-par recoveries. She points out that holdout strategies for responding to non-pro-rata LMEs are evolving as well and that investors and their advisors “have to be informed by the playbook but not constrained by it.”

In addition to highlighting the challenges and opportunities presented to holdouts in LMEs, Anne notes that the relatively recent focus on such transactions can distract from solving a company’s underlying business problems. She comments, “At some point, we should get back to restructuring principles and think about, what does the company really need, and get real about bankruptcy, which is there for a reason.”

Anne’s experience with LME litigation includes leading the innovative lawsuit challenging a 2024 Del Monte restructuring transaction through a Delaware Chancery Court proceeding rather than via a traditional breach of contract suit and her continuing work on the high-profile Serta LME litigation, which has served as a bellwether case for contract-based challenges to transactions relying on the “open market purchases” provision found in many credit agreements.

The full Octus article can be viewed here:  https://octus.com/resources/articles/saying-no-the-power-and-peril-of-the-lme-holdout/.