Senior bondholders are challenging Freescale's debt
restructuring, making an unprecedented challenge to the
material adverse effect (MAE) clause in the creditor agreement.
Unfortunately, the creditor agreement is covenant-lite.
In a case brought in New York State Supreme Court, ING
claimed US company Freescale violated an MAE clause in its
creditor agreement by restructuring loans with lower-level
"I haven't seen this type of argument before," said Alan
Goudiss of Sherman & Sterling. "And neither has anyone
The restructuring allowed $5 billion of junior notes to rise
to ING's senior...