Davis Polk partner Adam Shpeen was quoted in Reorg on the 2023 bankruptcy outlook. Discussing non-pro-rata transactions and pro-rata deals, Adam said, “Investors appear undeterred for the time being by recent judicial decisions at the motion to dismiss stage sustaining legal challenges to non-pro-rata transactions. For pro-rata deals, much attention is now being paid to the new, next-generation technology that mixes carrots and sticks to minimize holdout risk and motivate creditors to extend maturities and participate in transactions out of court - What incentives are sufficient to generate high levels of participation? At the same time, what set of sticks do you need to increase the risk for creditors who might consider not participating?”

“2023 Outlook: A Tale of Two Maturity Categories: Chapter 11 or Liability Management; Healthcare, Consumer Discretionary, Auto, Financial Services Sectors in Focus,” Reorg (January 9, 2023) (subscription required)

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