Due to the current economic downturn, many corporations (Borrowers) may find themselves in financial difficulty and need to refinance their existing debt obligations with creditors (Lenders). Such Borrowers may be able to reduce their financing costs through the issuance of “distress preferred shares” (DPS). This method of refinancing generally does not adversely affect the Lenders, as they can receive equal or better after-tax returns on their investments without jeopardizing their security and priority.

In November, members of our Bankruptcy & Creditors’ Rights group gave a presentation concerning the Midland Funding, LLC v. Johnson case then pending before the U.S. Supreme Court. The Supreme Court recently decided the case, holding that a debt collector who files a claim that is “obviously” barred by the statute of limitations has not engaged in false, deceptive, misleading, unconscionable or unfair conduct and thus does not violate the federal Fair Debt Collection Practices Act (FDCPA). Writing the opinion for the majority in favor of the debt collector, Justice Stephen G.