Covenants: Key Questions Investors Ask About the J Crew Maneuver (June 2, 2020)

The podcast discusses the use of unrestricted subsidiaries and the 'J. Crew trapdoor' in debt documents, as well as the transfer of assets to fund debt prepayments. It explores the loosening of covenant protection and examples of asset leakage to unrestricted subsidiaries. The potential ramifications of transferring unrestricted subsidiaries, including the loss of collateral and guarantees, are also discussed. The transfer of valuable IP and protection against leakage to unrestricted subsidiaries is explained, along with advice on how to protect against the transfer of valuable assets.