Economic twists and turns marked 2023 but the asset-based lending market still saw growth in commitments of working capital, according to data released by the Secured Finance Network (SFNet). And while there were fewer new client deals last year than in 2022, the deals were larger in size.

“Liability Management Transactions” continue to grab headlines. Companies in distress are turning to the out-of-court restructuring of their debt in ways that leave lenders who made loans on the basis of a senior secured position either with certain assets no longer available as collateral pursuant to a “drop down financing” or subordinate to new tranches of debt pursuant to an “uptiering transaction.” This article takes a look at the arguments being made in some of the litigation that has often followed on such uptiering transactions and in particular the June 2023 decision of the Bankruptcy Court in the Serta case.