Considerations for Structuring a Board of Directors When Pre-Petition Lenders Get Equitized

This article from ABI Journal was first published August 1, 2023. The entire publication is available at: https://www.abi.org/abi-journal/considerations-for-structuring-a-board-of-directors-when-pre-petition-lenders-get

When pre-petition lenders or other senior creditors are equitized in a Chapter 11 process, they become owners and operators of the reorganized entity upon emergence, which may include the responsibility of forming and serving on a board of directors charged with formulating a go-forward strategy. However, newly equitized owners often have a limited time horizon for their investment, and this can complicate the decision-making around strategic initiatives. This article discusses the unique considerations for newly equitized owners when forming and serving on a board of directors of a reorganized company.

Reprinted with permission from the ABI Journal, Vol. XLII, No. 8, August 2023.

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August 23, 2023

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