News and Analysis
Del Monte LME holdouts scored settlement win through unique legal strategy
- Max Reyes
- +Misha Ross
- + 1 more
•6 min read
When Del Monte enacted its LME last year, it presented a group of lenders with a dilemma.
Option A: Accept a deal on worse terms than the participating lenders leading the transaction;
Option B: Claim some combination of a breach of contract, fraudulent conveyance and/or bad faith, such as excluded lenders in cases like Serta Simmons and Robertshaw, in an attempt to unwind the transaction — an approach that often results in a prolonged legal battle with no guaranty of a favorable outcome;
Or Option C: Try something new.
They chose C. And it worked.
On 9 April (Wednesday), Del Monte said it agreed to a settlement over a lawsuit brought by Black Diamond, which is acting as the administrative and collateral agent on behalf of lenders that ended up not taking the deal (That group held $105.8m, or roughly 15%, of the 1L term loans, according to court filings). Under the settlement, the amounts held by non-participating lenders under the term loan due 2029 will be retired.
