Lenders Beware: Division in Delaware
Client Alert | 1 min read | 09.26.18
Recent amendments to the Delaware Limited Liability Company Act (DLLCA) should prompt lenders to take a closer look at their credit agreements and indentures and consider whether updates to those agreements are necessary. Effective August 1, 2018, a Delaware limited liability company (LLC) may divide itself into two or more LLCs and allocate the assets and liabilities of the dividing LLC among itself and/or the newly formed LLCs. This should be of concern to lenders because an allocation of assets by division may not violate the transfer and merger covenants in their loan agreements.
In this client alert, Gregory G. Plotko and Kevin Rubinstein examine the amendments to DLLCA and the safety measures lenders can implement to address this new type of division.
Contacts
Insights
Client Alert | 3 min read | 08.08.25
On July 24, 2025, President Trump signed an Executive Order titled “Saving College Sports” (the “Order”). The White House also released an accompanying Fact Sheet regarding the Order.
Client Alert | 4 min read | 08.07.25
Client Alert | 4 min read | 08.06.25
FinCEN Delays Implementation Date and Reopens AML/CFT Rule for Investment Advisers
Client Alert | 4 min read | 08.06.25
Series of Major Data Breaches Targeting the Insurance Industry
