A pebble thrown into a pond creates ripples likely to disturb the entire water body. In the debt market pond Serta Simmons was a boulder. The Fifth Circuit appellate court’s decision to overturn an earlier interpretation of “open market purchase” was a move that could potentially raise the dust over various aggressive liability management exercises both in the works and that have closed but had holdouts.

Terms of deals in the pipeline are already being reworked, as 9fin reported on Better Health. And lenders who were excluded from previous uptiering priming transactions have new leverage to reopen old cases if they did not sign releases.

Looking back at various deals that took place in 2024, a few trends are of note: Most deals were conducted with existing lenders and then ultimately got consents from nearly 100% of lenders even if the consideration was different.

Against this backdrop, lenders could leverage the Serta decision to push back on only the situations where they were true holdouts.