Wingspire Capital Holdings LLC (“Wingspire Capital”) announced an agreement to acquire Liberty Commercial Finance LLC (“Liberty”). Wingspire Capital is a portfolio company of Owl Rock Capital Corporation, a publicly traded business development company that is externally-managed by an indirect subsidiary of Blue Owl Capital Inc.

Lenders are faced with difficult circumstances when a borrower’s business and the bank’s collateral is deteriorating.  The downward spiral often includes declining or negative earnings, insufficient cash flow, declining enterprise value, escalating trade debt and “tripped” financial covenants.  Further, management has not been able to reverse these negative trends and worse, have likely not been able to forecast these problems before they were reported. This will certainly erode trust between a borrower and their banker. When a lender is primarily concerned with protecting its collateral in a deteriorating situation, measuring alternative options can be considered relative to control, time, exposure and cost.