Fallout continues from the November 2020 bankruptcy sale of Town Sports’ assets to a new entity backed, in part, by an ad hoc group of Town Sports’ prepetition lenders. A separate group of prepetition lenders who did not participate in the sale filed suit in May against the ad hoc group and the administrative agent for the lender syndicate, alleging that ad hoc group’s actions had rendered the non-participating group’s secured loans “essentially worthless.”[1]  The case, which is still in its early stages, demonstrates the importance of properly documenting a multi-party transaction and also provides another recent example of “lender on lender” violence.
Continue Reading Credit Bidding Gone Awry: Town Sports’ Prepetition Lenders Sue Each Other