Equitable Subordination Attacks on Secured Lenders

Most sophisticated lenders are aware of the traditional challenges to claims in bankruptcy, such as the avoidance of fraudulent conveyances and preferential transfers. Somewhat less recent attention has been paid, however, to equitable subordination, which, although rarer than avoidance actions, is an additional basis to attack secured claims. The doctrine of equitable subordination derives from the bankruptcy court's inherent equitable power and is codified in ' 510(c) of the Bankruptcy Code. See Pepper v. Litton, 308 U.S. 295 (1939). See also HBE Leasing Corp. v. Frank, 48 F.3d 623, 633 (2nd Cir. 1995) (“[e]quitable subordination is distinctly a power of federal bankruptcy courts, as courts of equity, to subordinate the claims of one creditor to those of others”).

Under the doctrine of equitable subordination, a bankruptcy court may subordinate for purposes of distribution a creditor's claim if it finds that the claim, while not lacking a lawful basis, nonetheless results from the creditor's inequitable behavior. Equitable subordination is remedial, rather than penal, and is designed to redress inequitable conduct of one creditor that harms other creditors. Although equitable subordination does not technically avoid the subordinated claim, preclusion may nevertheless be the practical consequence where the claim is subordinated to unsecured claims in cases lacking sufficient assets to pay unsecured creditors in full. [Note, equitable subordination provides for subordination of claims only to other claims or of equity interests to other equity interests; it does not permit courts to subordinate claims to equity interests, which rank lower than claims in the Bankruptcy Code's distribution priority scheme. Readers may notice broad similarities between certain conduct analyzed in this article and the elements of a cause of action based on non-bankruptcy lender liability principles and should thus appreciate that such conduct can create risks for lenders even where the borrower is not in bankruptcy.]

For equitable subordination to apply, three conditions must be met: 1) the claimant must have engaged in inequitable conduct; 2) the misconduct must have injured other creditors or conferred an unfair advantage on the claimant; and 3) subordination of the claim must not yield a result that would conflict with other provisions of the Bankruptcy Code.

In analyzing whether equitable subordination is warranted, courts look especially at whether the claimant is an “insider” of the debtor. This is because insiders' actions are subject to higher scrutiny than those of non-insiders and an insider's conduct need not be as egregious as that of non-insiders. The Bankruptcy Code defines an “insider” of a debtor corporation to include, inter alia, persons in control of the debtor. See 11 U.S.C. ' 101(31)(B). Where a lender is not a director, officer or major owner of the debtor, courts generally refuse to apply insider status unless the lender exercised a high level of control (such as the ability to dictate corporate policy, day-to-day management decisions, replacement of management, disposition of corporate assets, etc.) and/or conducted transactions with the debtor that were not at arms' length.

At the current point in the economic cycle, many borrowers are in default under their secured credit arrangements and at significant risk of going into bankruptcy. It therefore behooves lenders and their counsel to stay abreast of how bankruptcy courts are currently applying the doctrine of equitable subordination, and in particular, distinguishing actions lenders may take respecting their borrowers without crossing the threshold of inequitable conduct from conduct that is sufficiently overreaching to warrant equitable subordination.

Two decisions rendered this past summer, Official Comm. of Unsecured Creditors of Champion Enters. Inc. v. Credit Suisse, Case No. 09-14014 (KG), Adv. No. 10-50514 (KG), 2010 WL 3522132 (Bankr. D. Del. Sept. 1, 2010) and American Consol. Transp. Cos. Inc. v. RBS Citizens N.A., 433 B.R. 242 (Bankr. N.D. Ill. 2010) illuminate these distinctions.

'Champion'

In Champion, the U.S. Bankruptcy Court for the District of Delaware dismissed an adversary proceeding commenced by the creditors' committee seeking equitable subordination of the secured claims of the debtor's lending syndicate. Champion involved a pre-petition secured credit agreement pursuant to which the borrower, which was the principal operating company of the debtor group, granted the lenders a security interest in all of its assets. The borrower's parent, a holding company with no assets other than interests in its wholly owned subsidiaries (including the borrower), issued senior notes that were secured, equally and ratably with the lenders' loans, by the same collateral.

The borrower suffered business reverses within a year after entering into the credit agreement, and it negotiated several amendments thereto to avoid various defaults on its loan covenants. In the most notable amendment, the holding company agreed, allegedly at the lenders' suggestion, to issue new unsecured subordinated notes, the proceeds of which would be used primarily to redeem the existing secured notes and repay part of the borrower's secured bank debt.

This amendment improved the secured bank lenders' position because, once the pari passu secured note debt was extinguished, the secured bank lenders no longer had to share the collateral with the noteholders. The borrower, holding company and their affiliates commenced Chapter 11 bankruptcy cases two years after the subordinated notes were issued.

The committee alleged that the secured bank lenders were insiders of the debtor because, armed with their rights under the credit agreement, they coerced the borrower and holding company to enter into the amendments that improved the lenders' collateral position, mandated partial prepayment of the secured bank loans with the subordinated note proceeds and, in addition, compelled the payment of amendment fees and higher interest rates.

The committee further asserted that the secured bank lenders' actions injured the subordinated noteholders and afforded the lenders an unfair advantage over the subordinated noteholders with respect to their claims against the debtors.

The court found that although the committee alleged that the lenders exerted influence over the holding company regarding issuing the subordinated notes, it failed to allege facts that, even if true, would support finding that the lenders were insiders. Notably, the court stated that “where a lender's influence on a debtor's actions merely arises by operating [sic] of bargained for rights under a credit agreement, those 'reasonable financial controls negotiated at arms' length between a lender and borrower do not transform a lender into an insider.'” Champion, 2010 WL 3522132, at *7 (quoting In re Radnor Hldgs Corp., 353 B.R. 820, 847 (Bankr. D. Del. 2006)).

The court also held that the committee did not allege facts that rise to the level of inequitable conduct sufficient to warrant subordinating the lenders' claims because the lenders' actions were “typical lender behavior in distressed debt situations or arm's length dealings. Although the [lenders] may have forcefully negotiated, the fact that one party to a contract has more leverage does not indicate that the dealings are not at arm's length. Moreover, use of that leverage does not provide a basis for the Court to find inequitable conduct.” Id. at *9.

The Champion court expressly distinguished the facts before it from those in Official Comm. of Unsecured Creditors v. Credit Suisse First Boston (In re Exide Techs), 299 B.R. 732 (Bankr. D. Del. 2003), where the same court found that a lender's inequitable conduct had been alleged sufficiently. In Exide, the committee alleged that, in an effort to protect its liens and guarantees from avoidance, the lender dictated which of the debtor's affiliates would commence bankruptcy cases and when those cases would be commenced. The Exide lenders also allegedly caused the debtor's board of directors to replace an officer with a lender-friendlier individual.

'American'

In American, a Chapter 11 debtor and its debtor-affiliates sought, inter alia, equitable subordination of their principal secured lender's claims, and, as in Champion, the Bankruptcy Court for the Northern District of Illinois ruled that subordination was unwarranted. The debtors alleged that the lender: 1) induced them to enter into loan agreements containing financial covenants the lender knew the debtors either did not then satisfy or would thereafter be unable to satisfy, and then 2) used the debtors' defaults under those covenants to take control of the debtors and their business even though the debtors' loan payments were current.

More specifically, the debtors claimed that, when the lender entered into the loan agreement, it knew that the debtors had recently lost a major customer account that would decrease their annual revenue by 25%. Other recent changes in the debtor's business generally caused the lender to question many of its earlier assumptions about the debtors, including their ability to increase sales, reduce costs and otherwise offset the loss of their major account. The debtors alleged that the lender nevertheless required minimum cash flow and tangible net worth covenants; knew that, because of the lost business, the debtors were in default of the minimum cash flow covenant when the loan documents were executed; and believed that the debtor was in default of the tangible net worth covenant shortly thereafter. However, the lender took no remedial action until 20 months later, when it sent a letter declaring the defaults and demanding immediate payment.

The parties then entered into a forbearance agreement that, inter alia, required the debtors to furnish additional collateral, retain a chief restructuring consultant selected by the lender and, although the debtors wished to remain in business, use their best efforts to engineer a sale or refinancing transaction that would repay the lender in full.

According to the debtors, the forbearance agreement required that the restructuring consultant have wide-ranging managerial duties, including: 1) communicating directly with the lender regarding the debtors' finances and sale prospects; 2) directing the sale process; 3) providing financial analysis assistance to the debtors to identify cost savings and improve margins; 4) assisting the debtors' chief executive officer with all major business decisions and in supervising all of the debtors' officers, employees and consultants, including hiring and firing decisions and compensation; and 5) supervising all professionals retained by the debtors.

In American, the debtor first alleged that the lender was a fiduciary. The court noted that a debtor-creditor relationship is not a fiduciary relationship and a lender is not generally a fiduciary of its borrowers. However, “a lender that exerts control over a borrower may owe a fiduciary duty to that borrower.” American, 433 B.R. at 253. Such control, the court explained, “may be shown by the actual exercise of managerial discretion to such an extent that the lender usurps the power of the borrower's directors and officers to make business decisions.” Id.

In American, the court determined that the debtors failed to allege facts sufficient to show that the lender was a fiduciary. It explained that “control is not established when a lender insists on standard loan agreement restrictions, closely monitors the borrower's finances, and makes business recommendations ' Nor is control established when a borrower hires a management or restructuring consultant selected by the lender.” Id. The court further stated that even if the lender's requirement that the borrower retain a restructuring consultant with such wide-ranging duties established the necessary level of control, the consultant nevertheless was limited to advising and assisting in business decisions and lacked the power to make any business decisions unilaterally.

After determining that the lender was not a fiduciary, the court concluded that the lender's conduct was not so inequitable as to justify subordinating its claims. Because the debtors could have refused the lender's demands and allowed it to pursue its contractual remedies, the court was unpersuaded that the lender induced the borrowers to enter into the forbearance agreement and thereby forced them to provide additional collateral, adopt a sale strategy they did not want to pursue and retain a restructuring consultant against their wishes and on terms dictated by the lender. Rather, the court found, the borrowers chose to accede to the lender's requests.

Accordingly, it dismissed the equitable subordination claim and concluded that the acts complained of were nothing more than hard bargaining from a superior negotiating position. However, the court provided examples of when sufficient control may exist, including where a lender has a legal right to a controlling interest in the borrower's stock, effectuates termination of all employees except those necessary to liquidate the business, determines which of the borrower's creditors are paid, and tells a corporate officer he can quit if he disapproves of the lender's conduct. Id. at 254.

Observations

Champion and American prompt several observations.

• In light of the current economic state, debtors and their unsecured creditors are likely to continue pressing subordination claims against secured lenders in an effort to improve recoveries to unsecured creditors.
• Although court decisions such as Champion and American provide favorable precedent, secured lenders should not become so emboldened as to cross the line from permissible use of bargaining leverage to inequitable overreaching and control of a borrower's business affairs that could lead to their becoming an insider or fiduciary.
• Lenders should avoid being involved in the borrower's decision regarding whether and when it and its affiliates commence bankruptcy cases.
• When requiring borrowers to engage restructuring professionals and take other actions to improve liquidity and profitability, such as reducing staff or disposing of assets, secured lenders may be less vulnerable doing so in the form of recommendations or suggestions, as opposed to assuming decision-making authority for the borrowers.
• Lenders that designate directors to their borrowers' board should take precautions to assure that the designated directors are not involved in decisions regarding the lenders or the loans.
• Transactions between lenders and borrowers should be conducted at arms' length.
• Lenders entering into loan agreements with financially distressed borrowers should be mindful of whether the borrowers are likely to be unable to meet financial covenants in the loan documents soon after closing.

Conclusion

As illustrated by Champion and American, enforcement of the traditional rights of lenders with respect to debtors over whom the lenders hold great leverage should not, in itself, provide a basis for equitable subordination of the lenders' claims in bankruptcy, especially when the transactions are conducted at arms' length. However, lenders should be mindful not to use their leverage to such an extent that it could be construed as allowing them to dictate a borrower's management decisions or usurp its ability unilaterally to dictate its corporate policy.

This article first appeared in the New York Law Journal, a sister publication of this newsletter.

Alan M. Christenfeld is senior counsel at Clifford Chance US. Barbara Goodstein is a partner at Dewey & LeBoeuf. Rick B. Antonoff, a partner at Clifford Chance US, co-authored this article, and Sara M. Tapinekis, an associate at Clifford Chance US, assisted in its preparation.

Credit underwriting cycles have a predictable rhythm: Commercial lenders make ever-riskier loans during boom periods and then, during the busts that follow, often see their claims or liens attacked following the bankruptcy cases of their borrowers, either by the borrowers, their trustee or the official committee of unsecured creditors appointed in the case. The current recession is mature enough that a significant number of bankruptcies involving challenges to the secured claims of lenders have percolated to the point of decision.

Here, we discuss two recent cases involving equitable subordination in bankruptcy that should inform the conduct of lenders when dealing with financially deteriorating borrowers, especially in such matters as credit facility amendments, forbearance agreements and providing additional financing.

Background

Most sophisticated lenders are aware of the traditional challenges to claims in bankruptcy, such as the avoidance of fraudulent conveyances and preferential transfers. Somewhat less recent attention has been paid, however, to equitable subordination, which, although rarer than avoidance actions, is an additional basis to attack secured claims. The doctrine of equitable subordination derives from the bankruptcy court's inherent equitable power and is codified in ' 510(c) of the Bankruptcy Code. See Pepper v. Litton , 308 U.S. 295 (1939). See also HBE Leasing Corp. v. Frank , 48 F.3d 623, 633 (2nd Cir. 1995) (“[e]quitable subordination is distinctly a power of federal bankruptcy courts, as courts of equity, to subordinate the claims of one creditor to those of others”).

Under the doctrine of equitable subordination, a bankruptcy court may subordinate for purposes of distribution a creditor's claim if it finds that the claim, while not lacking a lawful basis, nonetheless results from the creditor's inequitable behavior. Equitable subordination is remedial, rather than penal, and is designed to redress inequitable conduct of one creditor that harms other creditors. Although equitable subordination does not technically avoid the subordinated claim, preclusion may nevertheless be the practical consequence where the claim is subordinated to unsecured claims in cases lacking sufficient assets to pay unsecured creditors in full. [Note, equitable subordination provides for subordination of claims only to other claims or of equity interests to other equity interests; it does not permit courts to subordinate claims to equity interests, which rank lower than claims in the Bankruptcy Code's distribution priority scheme. Readers may notice broad similarities between certain conduct analyzed in this article and the elements of a cause of action based on non-bankruptcy lender liability principles and should thus appreciate that such conduct can create risks for lenders even where the borrower is not in bankruptcy.]

For equitable subordination to apply, three conditions must be met: 1) the claimant must have engaged in inequitable conduct; 2) the misconduct must have injured other creditors or conferred an unfair advantage on the claimant; and 3) subordination of the claim must not yield a result that would conflict with other provisions of the Bankruptcy Code.

In analyzing whether equitable subordination is warranted, courts look especially at whether the claimant is an “insider” of the debtor. This is because insiders' actions are subject to higher scrutiny than those of non-insiders and an insider's conduct need not be as egregious as that of non-insiders. The Bankruptcy Code defines an “insider” of a debtor corporation to include, inter alia, persons in control of the debtor. See 11 U.S.C. ' 101(31)(B). Where a lender is not a director, officer or major owner of the debtor, courts generally refuse to apply insider status unless the lender exercised a high level of control (such as the ability to dictate corporate policy, day-to-day management decisions, replacement of management, disposition of corporate assets, etc.) and/or conducted transactions with the debtor that were not at arms' length.

At the current point in the economic cycle, many borrowers are in default under their secured credit arrangements and at significant risk of going into bankruptcy. It therefore behooves lenders and their counsel to stay abreast of how bankruptcy courts are currently applying the doctrine of equitable subordination, and in particular, distinguishing actions lenders may take respecting their borrowers without crossing the threshold of inequitable conduct from conduct that is sufficiently overreaching to warrant equitable subordination.

Two decisions rendered this past summer, Official Comm. of Unsecured Creditors of Champion Enters. Inc. v. Credit Suisse, Case No. 09-14014 (KG), Adv. No. 10-50514 (KG), 2010 WL 3522132 (Bankr. D. Del. Sept. 1, 2010) and American Consol. Transp. Cos. Inc. v. RBS Citizens N.A. , 433 B.R. 242 (Bankr. N.D. Ill. 2010) illuminate these distinctions.

'Champion'

In Champion, the U.S. Bankruptcy Court for the District of Delaware dismissed an adversary proceeding commenced by the creditors' committee seeking equitable subordination of the secured claims of the debtor's lending syndicate. Champion involved a pre-petition secured credit agreement pursuant to which the borrower, which was the principal operating company of the debtor group, granted the lenders a security interest in all of its assets. The borrower's parent, a holding company with no assets other than interests in its wholly owned subsidiaries (including the borrower), issued senior notes that were secured, equally and ratably with the lenders' loans, by the same collateral.

The borrower suffered business reverses within a year after entering into the credit agreement, and it negotiated several amendments thereto to avoid various defaults on its loan covenants. In the most notable amendment, the holding company agreed, allegedly at the lenders' suggestion, to issue new unsecured subordinated notes, the proceeds of which would be used primarily to redeem the existing secured notes and repay part of the borrower's secured bank debt.

This amendment improved the secured bank lenders' position because, once the pari passu secured note debt was extinguished, the secured bank lenders no longer had to share the collateral with the noteholders. The borrower, holding company and their affiliates commenced Chapter 11 bankruptcy cases two years after the subordinated notes were issued.

The committee alleged that the secured bank lenders were insiders of the debtor because, armed with their rights under the credit agreement, they coerced the borrower and holding company to enter into the amendments that improved the lenders' collateral position, mandated partial prepayment of the secured bank loans with the subordinated note proceeds and, in addition, compelled the payment of amendment fees and higher interest rates.

The committee further asserted that the secured bank lenders' actions injured the subordinated noteholders and afforded the lenders an unfair advantage over the subordinated noteholders with respect to their claims against the debtors.

The court found that although the committee alleged that the lenders exerted influence over the holding company regarding issuing the subordinated notes, it failed to allege facts that, even if true, would support finding that the lenders were insiders. Notably, the court stated that “where a lender's influence on a debtor's actions merely arises by operating [sic] of bargained for rights under a credit agreement, those 'reasonable financial controls negotiated at arms' length between a lender and borrower do not transform a lender into an insider.'” Champion, 2010 WL 3522132, at *7 (quoting In re Radnor Hldgs Corp., 353 B.R. 820, 847 (Bankr. D. Del. 2006)).

The court also held that the committee did not allege facts that rise to the level of inequitable conduct sufficient to warrant subordinating the lenders' claims because the lenders' actions were “typical lender behavior in distressed debt situations or arm's length dealings. Although the [lenders] may have forcefully negotiated, the fact that one party to a contract has more leverage does not indicate that the dealings are not at arm's length. Moreover, use of that leverage does not provide a basis for the Court to find inequitable conduct.” Id. at *9.

The Champion court expressly distinguished the facts before it from those in Official Comm. of Unsecured Creditors v. Credit Suisse First Boston (In re Exide Techs), 299 B.R. 732 (Bankr. D. Del. 2003), where the same court found that a lender's inequitable conduct had been alleged sufficiently. In Exide, the committee alleged that, in an effort to protect its liens and guarantees from avoidance, the lender dictated which of the debtor's affiliates would commence bankruptcy cases and when those cases would be commenced. The Exide lenders also allegedly caused the debtor's board of directors to replace an officer with a lender-friendlier individual.

'American'

In American, a Chapter 11 debtor and its debtor-affiliates sought, inter alia, equitable subordination of their principal secured lender's claims, and, as in Champion, the Bankruptcy Court for the Northern District of Illinois ruled that subordination was unwarranted. The debtors alleged that the lender: 1) induced them to enter into loan agreements containing financial covenants the lender knew the debtors either did not then satisfy or would thereafter be unable to satisfy, and then 2) used the debtors' defaults under those covenants to take control of the debtors and their business even though the debtors' loan payments were current.

More specifically, the debtors claimed that, when the lender entered into the loan agreement, it knew that the debtors had recently lost a major customer account that would decrease their annual revenue by 25%. Other recent changes in the debtor's business generally caused the lender to question many of its earlier assumptions about the debtors, including their ability to increase sales, reduce costs and otherwise offset the loss of their major account. The debtors alleged that the lender nevertheless required minimum cash flow and tangible net worth covenants; knew that, because of the lost business, the debtors were in default of the minimum cash flow covenant when the loan documents were executed; and believed that the debtor was in default of the tangible net worth covenant shortly thereafter. However, the lender took no remedial action until 20 months later, when it sent a letter declaring the defaults and demanding immediate payment.

The parties then entered into a forbearance agreement that, inter alia, required the debtors to furnish additional collateral, retain a chief restructuring consultant selected by the lender and, although the debtors wished to remain in business, use their best efforts to engineer a sale or refinancing transaction that would repay the lender in full.

According to the debtors, the forbearance agreement required that the restructuring consultant have wide-ranging managerial duties, including: 1) communicating directly with the lender regarding the debtors' finances and sale prospects; 2) directing the sale process; 3) providing financial analysis assistance to the debtors to identify cost savings and improve margins; 4) assisting the debtors' chief executive officer with all major business decisions and in supervising all of the debtors' officers, employees and consultants, including hiring and firing decisions and compensation; and 5) supervising all professionals retained by the debtors.

In American, the debtor first alleged that the lender was a fiduciary. The court noted that a debtor-creditor relationship is not a fiduciary relationship and a lender is not generally a fiduciary of its borrowers. However, “a lender that exerts control over a borrower may owe a fiduciary duty to that borrower.” American, 433 B.R. at 253. Such control, the court explained, “may be shown by the actual exercise of managerial discretion to such an extent that the lender usurps the power of the borrower's directors and officers to make business decisions.” Id.

In American, the court determined that the debtors failed to allege facts sufficient to show that the lender was a fiduciary. It explained that “control is not established when a lender insists on standard loan agreement restrictions, closely monitors the borrower's finances, and makes business recommendations ' Nor is control established when a borrower hires a management or restructuring consultant selected by the lender.” Id. The court further stated that even if the lender's requirement that the borrower retain a restructuring consultant with such wide-ranging duties established the necessary level of control, the consultant nevertheless was limited to advising and assisting in business decisions and lacked the power to make any business decisions unilaterally.

After determining that the lender was not a fiduciary, the court concluded that the lender's conduct was not so inequitable as to justify subordinating its claims. Because the debtors could have refused the lender's demands and allowed it to pursue its contractual remedies, the court was unpersuaded that the lender induced the borrowers to enter into the forbearance agreement and thereby forced them to provide additional collateral, adopt a sale strategy they did not want to pursue and retain a restructuring consultant against their wishes and on terms dictated by the lender. Rather, the court found, the borrowers chose to accede to the lender's requests.

Accordingly, it dismissed the equitable subordination claim and concluded that the acts complained of were nothing more than hard bargaining from a superior negotiating position. However, the court provided examples of when sufficient control may exist, including where a lender has a legal right to a controlling interest in the borrower's stock, effectuates termination of all employees except those necessary to liquidate the business, determines which of the borrower's creditors are paid, and tells a corporate officer he can quit if he disapproves of the lender's conduct. Id. at 254.

Observations

Champion and American prompt several observations.

• In light of the current economic state, debtors and their unsecured creditors are likely to continue pressing subordination claims against secured lenders in an effort to improve recoveries to unsecured creditors.
• Although court decisions such as Champion and American provide favorable precedent, secured lenders should not become so emboldened as to cross the line from permissible use of bargaining leverage to inequitable overreaching and control of a borrower's business affairs that could lead to their becoming an insider or fiduciary.
• Lenders should avoid being involved in the borrower's decision regarding whether and when it and its affiliates commence bankruptcy cases.
• When requiring borrowers to engage restructuring professionals and take other actions to improve liquidity and profitability, such as reducing staff or disposing of assets, secured lenders may be less vulnerable doing so in the form of recommendations or suggestions, as opposed to assuming decision-making authority for the borrowers.
• Lenders that designate directors to their borrowers' board should take precautions to assure that the designated directors are not involved in decisions regarding the lenders or the loans.
• Transactions between lenders and borrowers should be conducted at arms' length.
• Lenders entering into loan agreements with financially distressed borrowers should be mindful of whether the borrowers are likely to be unable to meet financial covenants in the loan documents soon after closing.

Conclusion

As illustrated by Champion and American, enforcement of the traditional rights of lenders with respect to debtors over whom the lenders hold great leverage should not, in itself, provide a basis for equitable subordination of the lenders' claims in bankruptcy, especially when the transactions are conducted at arms' length. However, lenders should be mindful not to use their leverage to such an extent that it could be construed as allowing them to dictate a borrower's management decisions or usurp its ability unilaterally to dictate its corporate policy.

This article first appeared in the New York Law Journal, a sister publication of this newsletter.

Alan M. Christenfeld is senior counsel at Clifford Chance US. Barbara Goodstein is a partner at Dewey & LeBoeuf. Rick B. Antonoff, a partner at Clifford Chance US, co-authored this article, and Sara M. Tapinekis, an associate at Clifford Chance US, assisted in its preparation.