Client Alerts & Newsletters

Lenders Beware: Division in Delaware

September 26, 2018

Recent amendments to the Delaware Limited Liability Company Act (DLLCA) should prompt lenders to take a closer look at their credit agreements and indentures and consider whether updates to those agreements are necessary. Effective August 1, 2018, a Delaware limited liability company (LLC) may divide itself into two or more LLCs and allocate the assets and liabilities of the dividing LLC among itself and/or the newly formed LLCs. This should be of concern to lenders because an allocation of assets by division may not violate the transfer and merger covenants in their loan agreements.

In this client alert, Gregory G. Plotko and Kevin Rubinstein examine the amendments to DLLCA and the safety measures lenders can implement to address this new type of division.

Click here to read the client alert. 

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Gregory Gennady Plotko
Partner – New York
Phone: +1.212.530.1924
Email: gplotko@crowell.com

Kevin Rubinstein
Partner – New York
Phone: +1.212.530.1818
Email: krubinstein@crowell.com

Crowell & Moring LLP is an international law firm with offices in the United States, Europe, MENA, and Asia that represents clients in litigation and arbitration, regulatory and policy, and transactional and corporate matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation and government-facing matters, as well as its ongoing commitment to pro bono service and diversity, equity, and inclusion.

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