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The firm represents banks and institutional investors in the purchase of second lien obligations. The second lien obligation is a hybrid of senior and subordinated debt with unique characteristics. Holders of second lien obligations expect to exercise greater rights than holders of subordinated debt, but understand that the holders of the first lien will impose some limitations on the freedom of action following a borrower default.

The firm's representation of second lien investors brings to bear the experience of seasoned finance attorneys who are familiar with the expectations of this market from a number of perspectives.

Second lien obligations are frequently found in leveraged transactions in which the second lien obligation is expected to be senior to subordinated debt in the capital structure of a borrower. Representation of investors in second lien loans requires recognition of the contractual limitations on rights of the second lien holders, which are expected by first lien holders. We make clients aware of the balance of competing interests of the first and second lien holders in insolvency and workout proceedings and regularly call upon bankruptcy and insolvency practitioners to provide dynamic support to attorneys counseling second lien investors.