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Posts Tagged ‘direction’

Mind the Gap: When Borrower’s Restructuring Goes Effective After the Trade Date but Before the Closing Date

Last quarter, as the YRC Worldwide Inc. (“YRC”) restructuring sped towards a conclusion, buyers and sellers with open trades of YRC’s bank debt pedaled furiously alongside in an attempt to negotiate, finalize and eventually fund side-letter agreements under which buyers issued directions regarding sellers’ rights, as record holders of the bank debt, to subscribe for additional YRC securities1.  As an illustration of how events unfolding during the gap between trade date and closing date of a sale of loans can require coordinated action by buyers and sellers, this situation was hardly unique.

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  1. YRC offered to record holders of so-called “Credit Agreement Claims” the right to, inter alia, subscribe for 10% Series B Convertible Senior Secured Notes Due 2015 in exchange for additional cash consideration.