Scott Greenberg Speaks to Debtwire About Liability Management Exercises and Third-Party Financings

In the Media  |  July 28, 2025

Debtwire

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Partner Scott Greenberg, Global Chair of our Business Restructuring and Reorganization Practice Group, was recently interviewed by Debtwire (subscription required) about the growing trend of companies paying work fees to third-party lenders in anticipation of potential “deal aways.”

Scott explained that while third-party financings are threatened in nearly every liability management transaction, they are rarely executed. Sponsors typically prefer to reach agreements with existing creditors, especially when a maturity is approaching.

He also noted that subordination protection in credit agreements can help align drop-down proposals between existing lenders and third-party financing providers. “However, in the absence of subordination protection, existing lenders can typically offer a priming facility and be more competitive in pricing given their attachment point.”

While third-party financings are on the rise, Scott emphasized that they remain uncommon. “It sounds like there may be a few cases here or there, but it is certainly the exception and not the rule,” he said. “Perhaps we are poking the bear, but I think until you see it really tick up in practice, [third-party financings] will continue to be a bit of a hammer for negotiations rather than a real alternative.”

Debtwire noted that Gibson Dunn is “known for engineering some of the market’s most complex and high-profile transactions.”