Distressed Debt and Claims Trading

Attorneys in Katten’s Distressed Debt and Claims Trading Practice have represented investors in distressed companies in connection with over 1,000 transactions, aggregating in the billions of dollars.

Our attorneys represent investment banks, commercial banks and domestic and international hedge funds in their acquisitions and sales of distressed investments, including bank loans, trade claims and swap claims, in addition to privately traded securities. We are members of both the Loan Syndications and Trade Association (LSTA) and the Loan Market Association (LMA), and our attorneys are active participants in committees and working groups involved in the development of standard documentation and resolution of market disruptions in the U.S. market. Katten’s debt and claims trading experience includes:

• Secondary Loan Trading: Negotiation of trade confirmations, purchase and sale agreements, participation agreements and collateral agreements based on the LSTA form agreements in the U.S. market and based on the LMA form agreements for the European market for both par and distressed trades. We are experienced advisors on issues relating to confidential information issues in loan trading. Recently, our attorneys have counseled clients in the following credits: Tribune, Ford, General Motors, Chrysler, Lyondell, Las Vegas Sands, CIT, Delphi, Visteon and many others.
• Trade Claims: We routinely represent clients in their acquisition of trade claims against debtors in Chapter 11 and 7 proceedings. These transactions have involved the transfer of secured, administrative expense and general unsecured claims. In addition to the negotiation of assignment agreements, we provide diligence into the validity and size of the claims and risks presented by counterparties. Recently, we have counseled several clients in their diligence into, and purchase of claims against, various domestic and international Lehman Brothers affiliates arising under terminated ISDA master agreements, repurchase agreements and complex securities offerings.
• Stand-by Claims Purchase (Put) Agreements and Programs: We have represented both providers and purchasers of the right to sell accounts receivable at pre-negotiated prices upon an event of default by one or more customers.
• Settlement of Disputed Claims in Bankruptcy Cases: We assist our clients in facilitating the negotiation of settlements of claims purchased from third parties, often involving preferential payments.

We work closely with our colleagues who focus on derivatives and restructuring and coordinate international issues with attorneys at our London affiliate, Katten Muchin Rosenman UK LLP. Our clients also benefit from the depth of experience in Katten’s Financial Services, Bankruptcy and Creditors’ Rights and Tax Planning practices.

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