March 25, 2020 - The LSTA has distributed to members the Exposure Draft of the LSTA’s Model Transfer Provisions for Restructuring Support Agreements (RSAs).
In certain Chapter 11 cases or out-of-court restructurings, debtors ask their creditors to sign RSAs in connection with the proposed restructuring. Those RSAs typically provide that the creditor will vote in favor of, or not oppose, the proposed restructuring. The RSAs also restrict a creditor’s right to transfer its claim to a party that has not signed the RSA, so that the apparent support for the plan does not fade away as creditors trade out of their positions. The LSTA’s Model Transfer Provisions for RSAs provide a complete set of transfer provisions which serve to preserve the debtor’s desire to maintain support for the restructuring while seeking to avoid inconsistency and promote liquidity in the market. It is hoped that these Model Transfer Provisions will offer helpful guidance to members.
The Model Transfer Provisions have been developed and vetted by the LSTA’s Trade Practices and Forms Committee. Rich Levin, partner and co-chair of the Restructuring and Bankruptcy Department at Jenner & Block, acted as external counsel on the project.
Once published in final form in April, the LSTA’s current “Model Marketmaker Exception” Market Advisory published in 2012 will be superseded and no longer be available on the LSTA’s website.
Please contact Tess Virmani for more information.