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A federal appeals court has invalidated a controversial corporate debt restructuring manoeuvre, ruling a lower bankruptcy court erred in its handling of the 2023 Chapter 11 restructuring of the mattress retailer, Serta Simmons Bedding.
However, a New York appeals state court issued a contradictory ruling on the same issue on Tuesday afternoon, creating confusion about the state of the law and leaving lawyers and investors scrambling to understand the conflicting decisions.
Minority lenders of Serta, which included funds such as Angelo Gordon and Apollo Global Management, had their loan interests pushed aside for repayment in a 2020 refinancing transaction known as an “uptier exchange”. The move allowed a slim majority of Serta lenders to leapfrog the minority group, which recovered little on its loans in…
