A recent decision of the Delaware bankruptcy court serves as a reminder of a key risk for lenders who finance leveraged transactions—namely, that a bankruptcy court may “collapse” the components of a leveraged transaction in order to avoid the lender’s liens and the debtor’s loan obligations as fraudulent transfers.
USA, Delaware, Insolvency & Restructuring, Litigation, Blank Rome LLP, Bankruptcy, Credit (finance), Debtor, Fraud, Refinancing, Default (finance), Sponsor (commercial), Leverage (finance), Secured loan, United States bankruptcy court