FICC Focus State of Distressed Debt: Jennifer Selendy on LME Battles, Antitrust
Dec 8, 2025
In a riveting discussion, Jennifer Selendy, founding partner of Selendy Gay and a seasoned litigator in bankruptcy and liability management, shares her insights on the antitrust challenges surrounding creditor cooperation agreements. She reveals the complexities of LME litigation, highlighting surprising early lessons. Additionally, she discusses excluded lenders' tough choices, the pressure on private equity sponsors, and the potential for future litigation around NDAs. As the market evolves, Selendy anticipates ongoing legal creativity in restructuring absent major reforms.
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Ambiguity Drives LME Creativity
- Liability management agreements exploit ambiguity in credit documents to enable creative up‑tiering and other transactions.
- Litigation closes some loopholes but market participants quickly find new drafting gaps to pursue.
Weigh Litigation Versus Consolation Deals
- Excluded lenders should evaluate whether to accept consolation deals or pursue litigation by closely reviewing credit agreement language.
- Prepare for long, costly suits and consider pre‑litigation negotiation to secure steer‑co participation.
LMEs As Bankruptcy Prepositioning
- Many sponsors use LMEs to reshuffle creditor priorities ahead of a potential bankruptcy.
- Those non‑pro rata transactions often position favored lenders to secure DIP financing, fees, and enhanced rights in court.