Excluded Lender Group Wins Important Appeal Against Serta Simmons Reaffirming Proportional Treatment in Syndicated Debt Deals

Paul, Weiss won a significant appeal on behalf of a group of Serta Simmons lenders excluded from a 2020 debt restructuring deal. The opinion by the Fifth Circuit reversed the Houston bankruptcy court’s decisions in the mattress-maker’s chapter 11 cases that had validated the 2020 uptier transaction with a subset of favored lenders and rejected the excluded lenders’ counterclaims against the favored lenders. The Fifth Circuit also remanded the dispute for further proceedings on the excluded lenders’ counterclaims.

The Paul, Weiss team included, among others, litigation partners Andrew Ehrlich, Lewis Clayton and William Marks, and restructuring partners Brian Hermann and Ken Ziman; and litigation counsel Robert Kravitz and Robert O’Loughlin.