FICC Focus State of Distressed Debt: Cadwalader’s Mintz on Recent LME Litigation
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Oct 20, 2025 Douglas Mintz, a partner at Cadwalader specializing in financial restructuring, discusses the evolving landscape of distressed debt and creditor strategies. He advocates for proactive co-ops among lenders to avoid chaos during liability management exercises. The conversation delves into recent court rulings affecting restructuring practices, market shifts towards inclusive deals, and the implications of litigation cases like Serta and Mitel. Mintz also addresses the risks of premature organizing and sheds light on notable ongoing legal developments in the space.
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Communications Sector: Winners And Remaining Stress
- Stephen Flynn highlighted communications as the most distressed sector, powered by asset sales and liability management wins.
- Big moves like Dish, Lumen and Warner drove sector outperformance despite ongoing stressed names like Altice USA.
Out‑Of‑Court Restructurings Are Now Dominant
- Post‑2020 restructurings shifted heavily out‑of‑court due to abundant liquidity and cov‑light loans.
- Fewer bankruptcies plus market certainty around the code pushed liability management exercises upward.
Sign Co‑ops Right After Closing
- Sign a creditor co-op immediately after the loan closes and let it sit until needed to avoid panic-driven value loss.
- Early co-ops reduce market frenzy and set clear rules before distress becomes visible.