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Speaker 1: Hello, and welcome to the Credit Edge, a WEEKI Monkets podcast.

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Speaker 1: My name is James Grumby. I'm as senior editor at Bloomberg.

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Speaker 2: And I'm Steve Flynn. I'm a team leader and senior

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Speaker 2: credit analyst for Bloomberg Intelligence and I cover the communications sector.

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Speaker 2: This week, we're very pleased to welcome Scott Greenberg, Global

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Speaker 2: Chair of the Business Restructuring and Reorganization Practice at Gibson Dunn.

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Speaker 2: How are you, Scott, I'm good, Thanks for having me in,

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Speaker 2: Thanks for being here. Scott is a partner in Gibson

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Speaker 2: Dun's New York office, Global chair of the firm's Business

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Speaker 2: Restructuring and Reorganization Practice Group and a member of the

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Speaker 2: firm's executive Committee. Scott focuses on representing debtors and creditors

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Speaker 2: in court and out of court restructurings. Chambers USA described

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Speaker 2: Scott as an excellent lawyer and deal maker that is brilliant,

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Speaker 2: super connected, and great at managing adversaries and clients. Prior

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Speaker 2: to joining Gibson Dunn, Scott was a partner at Jones

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Speaker 2: Day from twenty thirteen to twenty nineteen, where he also

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Speaker 2: served as co head of the Jones Day business restructuring

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Speaker 2: and reorganization practice. Scott has received numerous awards and accolades

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Speaker 2: from industry associations and publications, including deal Maker of the

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Speaker 2: Year from The American Lawyer in twenty twenty one. Scott

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Speaker 2: has recently represented lenders in a number of large restructurings,

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Speaker 2: including for Altese France, which was the first large scale

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Speaker 2: liability management exerciser l and E in Europe, Comscope, and

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Speaker 2: Diamond Sports Group.

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Speaker 1: So thank you, Steve, for as we say every week now.

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Speaker 1: Credit markets are hot and companies are taking advantage, raising

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Speaker 1: tens of billions of dollars in new debt over the

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Speaker 1: last few weeks. There's also more distress. Rates are staying

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Speaker 1: high for longer than most people had expected. There's a

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Speaker 1: large pile of debt coming due. At the same time,

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Speaker 1: Trade wars and a whole load of other US policy

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Speaker 1: uncertainties are pushing companies to the brink. They are trying

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Speaker 1: to stay alive by using ever more creative, some would

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Speaker 1: say overly aggressive tactics to write down debt and delay repayments.

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Speaker 1: So Scott, let's start there. You are the perfect guests

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Speaker 1: to discuss this. Where do we go next with the lemes.

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Speaker 1: Otherwise there haven't been that many recently. I all we

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Speaker 1: hitting some kind of a wall, given potential for reputational

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Speaker 1: risk and the longer term damage to the investor base.

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Speaker 3: I don't think so. I mean, I do agree that

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Speaker 3: there was probably a small pause. I think some of

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Speaker 3: that was candidly just over the summer, people taking a break,

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Speaker 3: maybe our lender base having enough of the lemies they

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Speaker 3: had their fill. But I don't think the overall playbook

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Speaker 3: has changed. I think, you know, particularly in the stressier

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Speaker 3: situations where you continue to have borrowers and sponsors with

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Speaker 3: flexibility in their documents, and particularly in a situation where

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Speaker 3: they have time, meaning there's not a catalyst, liquidity or

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Speaker 3: maturity that's going to limit their playing field. I think

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Speaker 3: you'll continue to see the lemy played book rolled out.

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Speaker 3: You know, whether or not it's going to be to

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Speaker 3: the level of volume we've seen over the last year

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Speaker 3: or two, I guess remains to be seen. I think

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Speaker 3: you're starting to see some companies just kind of tip

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Speaker 3: over and go the traditional way here in the US,

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Speaker 3: you know, a chapter over season, a different type of process.

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Speaker 3: But don't I don't think you've seen a real material

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Speaker 3: slow down in Leomi. I think it will continue.

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Speaker 2: Skins often asked who really benefits from an lem as

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Speaker 2: a lot of companies and ultimately end up in bankruptcy.

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Speaker 2: There was an interesting article the other day on the

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Speaker 2: Terminal about a report from Edward Altman and Eric Rosenthal

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Speaker 2: that talked about the number of companies that file for

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Speaker 2: bankruptcy within two years of executing a large scale ANLUM.

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Speaker 3: Right, I mean, my honest answer to that question is,

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Speaker 3: and it's a good question, is always the same, I think,

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Speaker 3: particularly in a private scenario, of the sponsors almost always

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Speaker 3: benefit because if you step back and look at the situation,

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Speaker 3: presumably there was some financial crisis that they are staving

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Speaker 3: off where there may have otherwise been a change of

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Speaker 3: control or a more traditional process which would facilitate a

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Speaker 3: transfer of ownership. The sponsors continuing to stay in their

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Speaker 3: seat through these lemies. So I think while they may

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Speaker 3: be giving up document flexibility and other things as the

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Speaker 3: trade with the paribial lenders, in the long run, even

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Speaker 3: if it files for bankruptcy in two or three years, right,

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Speaker 3: they bought those extra two or three years, and whether

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Speaker 3: or not obviously result in what they want. It is

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Speaker 3: a different question, I think. Apart from that, obviously you

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Speaker 3: need two to tango, so to speak, and you need

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Speaker 3: willing lenders to participate in these transactions. And I'm sure

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Speaker 3: we'll talk about this, but I think historically what we've

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Speaker 3: been seeing, particularly in the US and most see what

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Speaker 3: happens in Europe has been, you know, the larger institutions,

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Speaker 3: the ones with more exposure, are obviously better situated at

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Speaker 3: the negotiation table to do better for themselves gosh.

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Speaker 2: And then lemies are typically more successful if they're in

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Speaker 2: conjunction with a company doing some sort of turnaround. Correct. Like,

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Speaker 2: I cover the communications sector, and I've seen cases where

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Speaker 2: that works, in cases where it does, and a great

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Speaker 2: one was lumin Technologies. They did at a very large

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Speaker 2: scale l ME a couple of years ago, and then

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Speaker 2: they turned around and they signed some high capacity network

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Speaker 2: deals for AI capacity that brought in a lot of

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Speaker 2: cash up front, really helped turn their business around. They

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Speaker 2: turned around, they're selling their consumer five operations to AT

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Speaker 2: and T and you've seen a significant increase in their

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Speaker 2: bond prices, a lowering of their bond yields. So it

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Speaker 2: has worked. But there was in conjunction with something helping

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Speaker 2: turning it around. The other side of the story could

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Speaker 2: be a company like iHeart. They just did a rather

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Speaker 2: large restructuring lemy within the past year. But you know,

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Speaker 2: the industry still faces a challenge. So a lot of

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Speaker 2: those bonds are yielding well over eleven percent, so there's

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Speaker 2: still difficulties there, right.

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Speaker 3: I mean, look, some of these are play for time.

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Speaker 3: If you think about kind of traditional commodity driven businesses

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Speaker 3: where you have cycles and maybe it's the wrong time

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Speaker 3: in the cycle for the business and they're the sponsor

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Speaker 3: and the owner just looking for more time for that

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Speaker 3: cycle to come back. There seems to be more receptivity

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Speaker 3: because the people and invest in these businesses seem to

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Speaker 3: understand that. In leemy for the sake of an enemy,

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Speaker 3: which I think is kind of the other end of

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Speaker 3: the spectrum where lenders are just taking discount and hoping

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Speaker 3: for a better day without a real game plan, as

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Speaker 3: you said, whether it's M and A or something else,

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Speaker 3: or a change in the industry or macro change like

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Speaker 3: we've seen with some of the terrific issues that have

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Speaker 3: impacted the trading prices of these credits. I think that's

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Speaker 3: probably where you're seeing a little bit of a slowdown

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Speaker 3: of the desire on the lenders part because again, you

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Speaker 3: need two parties to do these, to engage in analomy, right,

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Speaker 3: there needs to be a bigger selling point. We're doing

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Speaker 3: this because, right because there's a change that ultimately is

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Speaker 3: going to result in the company doing better and therefore,

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Speaker 3: as lenders to the company, your recovery is being better.

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Speaker 1: There's also some concern around the kind of legality of these,

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Speaker 1: you know, given that they are getting very aggressive and

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Speaker 1: some people getting a bit aggrieved. We had you a

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Speaker 1: recent event in LA when you were alongside Cuxton Ellis

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Speaker 1: to find his point of David Nemchek, who said that

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Speaker 1: these tools for allowing creditors to band together for greats

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Speaker 1: and negotiating leverage against borrows could be illegal. He's calling

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Speaker 1: them anti competitive. What do you make of that?

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Speaker 3: I think, with all due respect to Dave, who I

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Speaker 3: know and respect, I think you should stay in his lane.

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Speaker 3: I don't think on this particular subject he's right. I mean,

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Speaker 3: we've spent a lot of time with our anti trust

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Speaker 3: experts internally and my competitors who also put out cooperation

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Speaker 3: agreements in the market I'm sure have done the same, right,

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Speaker 3: we don't do anything without doing our work on the

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Speaker 3: front end. And I think the punchline is we don't

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Speaker 3: feel that they are now. You know, within the current

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Speaker 3: construct there may be constructs where people overreach and say

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Speaker 3: and this doesn't exist at least to the best of

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Speaker 3: my knowledge. But you know, for example, if XYZ sponsor

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Speaker 3: comes to the market, we're all going to band together

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Speaker 3: in any future financing and not give them financing for

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Speaker 3: less than you know, S plus one thousand. Like that

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Speaker 3: definitely has some anti competitive overlay, but that's not what

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Speaker 3: these documents do. So I think they thread the needle.

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Speaker 3: I understand why if you're you know, and they clearly are,

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Speaker 3: you know, the dominant player on the company sponsors side,

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Speaker 3: why you don't like them because they're taking away some

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Speaker 3: of the flexibility that you would otherwise have under the document.

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Speaker 3: So I get the chessboard. We all play chess for

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Speaker 3: a living. But I think as it relates to legality,

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Speaker 3: I think we feel very comfortable that they're fine.

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Speaker 1: But do you feel that the smaller lenders might litigate?

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Speaker 1: I mean, as our ACE reporters, Reshmi bas who puts

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Speaker 1: it private equity is dumping angry lenders in the cheap seats.

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Speaker 1: There's a class system developing, there's a whole you know

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Speaker 1: a load of examples of smaller investors getting burned.

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Speaker 3: I think it depends, right, and this is kind of

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Speaker 3: the the art, not science, to these enemies on a

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Speaker 3: one by one basis, right in. What you're talking about

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Speaker 3: is kind of the textbook elemy where there's a deal

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Speaker 3: with the sponsor and there is a disparity in treatment,

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Speaker 3: usually from and it's usually just the function of the

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Speaker 3: largest lenders to the small slenders. To your point, then obviously,

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Speaker 3: if you're the smaller lender and you're not getting the

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Speaker 3: same deal, you're not very happy. I think the question

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Speaker 3: becomes is the deal good enough where those lenders, while

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Speaker 3: they may not love it, will participate because the alternative

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Speaker 3: is not great, Or do you end up in a

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Speaker 3: situation where the deal is so aggressive that people just say,

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Speaker 3: you know, why not just litigate? Right at this point,

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Speaker 3: I've been put to your point all the way up

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Speaker 3: in the nosebleeds, and it's worth hiring a lawyer and

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Speaker 3: fighting the fight, I would say, at least, And we've

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Speaker 3: had a couple that have had some litigation, but at

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Speaker 3: least in most of the lme's there's very high participation

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Speaker 3: and take up, which I think is a sign that

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Speaker 3: you know, collectively, the company and the lenders and the

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Speaker 3: advisors kind of thread the needle in the right way

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Speaker 3: where it's kind of good enough, where everyone's going to participate,

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Speaker 3: even if it's not equal treatment.

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Speaker 2: So if we take a step back, when you think

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Speaker 2: about forming a group or representing debt holders, so how

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Speaker 2: early do you get involved and how quickly do you

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Speaker 2: try to form a group with a cooperation agreement?

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Speaker 3: Two different things in my mind, and group formation, you know,

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Speaker 3: comes in many flavors. I think the reality is, and

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Speaker 3: I think everyone understands this. There's there's a lot of

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Speaker 3: movement early on the on both sides of the transom,

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Speaker 3: on the lender and on the borrowers side. But I

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Speaker 3: think on the lender side, and I think a lot

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Speaker 3: of credits are probably coming into people's visibility, probably you know,

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Speaker 3: sooner than is obvious, meaning you know, we'll be talking

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Speaker 3: to a very large lender in a particular credit. It's

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Speaker 3: on their internal watch list. Maybe it's still trades in

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Speaker 3: the nineties, it's got some macroheadwinds, you know, and dependent

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Speaker 3: candidly with the lum environment. Depending on who the sponsor is,

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Speaker 3: people may say, as soon as this trade's off, we

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Speaker 3: need to organize because we're worried the sponsor may be aggressive.

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Speaker 3: So there are different catalysts, but I would say generally speaking,

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Speaker 3: organization comes early. The reality is by the time something

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Speaker 3: hits you know, your guy's news wire or you know,

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Speaker 3: bankruptcy rags or whatever, you should assume that deal has

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Speaker 3: been staffed for a very long period of time as

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Speaker 3: an advisor, and so I think that has been the

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Speaker 3: case for a while. Cooperation agreements, I do not think,

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Speaker 3: despite everyone probably feels like you know, in every deal

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Speaker 3: we're out peddling a cooperation agreement, it's not one size

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Speaker 3: to it's all. There are plenty of deals where a

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Speaker 3: cooperation agreement doesn't make sense because it may limit your

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Speaker 3: optionality in terms of what you want to do and

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Speaker 3: without going too far down the transmit. But like we

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Speaker 3: did Tropicana earlier this year, and we never had a

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Speaker 3: cooperation agreement in that deal, and that wound up being

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Speaker 3: an enemy with a multi tiered approach like we've talked

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Speaker 3: about in other situations where you have you know, long

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Speaker 3: dated maturities, which by definition means that the company has

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Speaker 3: more time to play the games and needs to play

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Speaker 3: and lose documents. And perhaps a sponsor who's known for

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Speaker 3: not being afraid to use the room and their documents

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Speaker 3: and cooperation rooments makes more sense. But it is not.

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Speaker 3: It's not as easy as a decision as I think

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Speaker 3: maybe the outside thinks it is. It's something that people

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Speaker 3: ponder and debate as a group. I mean, we're having

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Speaker 3: a couple of debates on it this week on different credits,

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Speaker 3: whether or not it makes sense.

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Speaker 2: So and when forming a group, do you try and

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Speaker 2: reach certain thresholds as far as owning a certain amount

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Speaker 2: of principle and whether in different parts of the capital

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Speaker 2: structure right so that you have the term loans, maybe

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Speaker 2: secured bonds on secured bonds, hold co OpCo or do

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Speaker 2: you look at some of the biggest bonds there and

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Speaker 2: try and get a obviously over fifty percent would be great,

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Speaker 2: But are the certain percentages where you feel you have

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Speaker 2: enough to go to the company and yeah.

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Speaker 3: I think you hit. I mean, this goes back ten years,

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Speaker 3: long before the world of alomy. Just in the world

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Speaker 3: of like amendments and forbearance agreements and waving defaults when

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Speaker 3: we actually had covenants. The fifty percent, particularly in the

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Speaker 3: TLB market obviously, is usually the magic number that were

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Speaker 3: aiming for. I think sub fifty percent. You have to

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Speaker 3: think about it from the company's perspective, like what do

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Speaker 3: you really have to offer? Right, So in a traditional environment,

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Speaker 3: you know I could wave, I can forbear, I can amend,

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Speaker 3: I could do things to help the borrow or if

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Speaker 3: they get in a tough spot from a financing perspective,

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Speaker 3: In a document that you know doesn't have things like

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Speaker 3: support nation protection, I could provide new money on a

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Speaker 3: super senior basis with fifty one percent. And then in

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Speaker 3: the LME environment, you can provide amendments that may be

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Speaker 3: necessary to the documents to implement the LME. So look,

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Speaker 3: when you first start, a group might might be thirty

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Speaker 3: five or forty like sure, but I think realistically for

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Speaker 3: you to have bargaining power from the other side's perspective,

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Speaker 3: you should probably have north of fifty percent.

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Speaker 1: Do you tend to represent these DICO or the restructuring group?

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Speaker 3: Oh, that's a great question. So usually the way it

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Speaker 3: happens is there will come together first. It It should

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Speaker 3: be the largest lenders by definition, right, because they are

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Speaker 3: the ones picking advisors, bankers and lawyers, and usually at

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Speaker 3: least in my deals. Right Because to the point you

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Speaker 3: were making earlier, a lot of these things form early

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Speaker 3: and kind of sit around for a little while. A

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Speaker 3: STEERCO really only gets constituted at a time when things

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Speaker 3: are starting to move. So companies advisors reach out, they

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Speaker 3: send across an NDA to us and our banker they're

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Speaker 3: ready to talk. That's the time usually where you'll solidify

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Speaker 3: a steerco. It doesn't usually make sense early on in

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Speaker 3: an engagement to create that dichotomy because it's you know,

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Speaker 3: some of these deals some may just get refinanced and

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Speaker 3: nothing ever happens. Right, So there's not there's no point.

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Speaker 1: Right, Okay. In general, valuations are coming down, you know,

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Speaker 1: the economy slowing their headwinds. How is that changing the

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Speaker 1: restructuring tools?

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Speaker 3: I think I'm seeing that, you know, despite maybe some

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Speaker 3: pressed to the contrary, like what I'm seeing actually is

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Speaker 3: a decent amount of traditional restructuring uptick. Again, I don't

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Speaker 3: think LEM is going anywhere. I think that tool will

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Speaker 3: remain a great tool for candidly for sponsors and to

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Speaker 3: a lesser extent for our clients. But I have seen both,

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Speaker 3: you know, new deals that need to go traditional restructuring

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Speaker 3: because the problem is too big to solve through an lemy,

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Speaker 3: or there's a liquidity crisis that no one's going to

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Speaker 3: fund without fixing the balance sheet. And I've candidly had

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Speaker 3: you know, multiple of my old lems, and this will

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Speaker 3: be you know, to your earlier point the test of time.

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Speaker 3: I've had some old lem's come back that you know,

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Speaker 3: we did the lemy and the band aid kind of

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Speaker 3: slipped off in this environment, and it's probably going to

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Speaker 3: need to be a real restructuring this time.

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Speaker 1: On the sponsor's side, are you seeing more than by

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Speaker 1: a bat that debts.

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Speaker 3: Certain sponsors, I think certain sponsors that are more credit savvy,

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Speaker 3: like without naming any names, like some of the big

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Speaker 3: sponsors that are also big credit players in those situations,

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Speaker 3: we tend to see them be more astute too, you know,

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Speaker 3: particularly if they think things are just mispriced, you know,

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Speaker 3: going in and buying up a lot of you know,

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Speaker 3: sometimes a lot of the junior in debtedness, which obviously

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Speaker 3: is gonna be trading at the discount the most discount.

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Speaker 3: And then I've had situations some of which I'm involved,

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Speaker 3: now are you know? Unknowingly to us, the sponsor got

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Speaker 3: involved in the capital structure, and then when we came

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Speaker 3: to the table to negotiate a deal, they used it

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Speaker 3: as a leverage chip, right, like I'll take this debt

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Speaker 3: and subordinate it if you'll do X, Y and Z.

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Speaker 3: So I think it's it's definitely a play. I don't

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Speaker 3: think it's all sponsors though, I think it's a subset

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Speaker 3: of sponsors.

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Speaker 1: What about sponsors stress more broadly? Are using situations where

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Speaker 1: there is stress spreading across the portfolio and how does

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Speaker 1: that affect sponsor's choice and what to do.

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Speaker 3: You mean like one particular sponsor having a lot of

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Speaker 3: distressed names? Yes, yeah, I mean I think we probably

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Speaker 3: know who all those are. But yeah, I mean I

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Speaker 3: think the ones that have had a lot of distress

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Speaker 3: in their portfolios to deal with tend to be the

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Speaker 3: ones that are doing more of the leemy stuff, right

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Speaker 3: because they're trying to figure out a way to punt

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Speaker 3: things forward and give themselves a lifeline. Just thinking through

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Speaker 3: the things we have in the pipeline, Like, yeah, we

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Speaker 3: have the flip side of that is also true, though,

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Speaker 3: as I say it out loud, I mean, we have

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Speaker 3: some sponsors that are like you know, white shoe sponsors

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Speaker 3: that everyone knows, that have several troubled names in their

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Speaker 3: port co in their portfolio that historically have not engaged

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Speaker 3: in lemy and don't seem to be interested in engaging

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Speaker 3: in eleme. So it's really a mix bag.

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Speaker 2: So the investors you work with, I think you mentioned

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Speaker 2: this earlier about putting new money in so just you know,

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Speaker 2: question is how willing are they often to invest more money?

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Speaker 2: Is it throwing good money after bad? I mean I

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Speaker 2: can think of a recent example where it's worked. Echo

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Speaker 2: Star Yeah great, right, Like so they well they did

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Speaker 2: two things, trying to do something with the DBS bond holders,

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Speaker 2: which they fought back on and that seemed to be

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Speaker 2: the right move. Give one of those DBS bonds traight now.

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Speaker 2: But the Echo Star convert holders not only did they

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Speaker 2: roll over their convert but they invested a lot of

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Speaker 2: new money with a large new bond. And now with

348
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Speaker 2: the recent spectrum sales, those bonds are up. You know,

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Speaker 2: I've done very very well. So it's just the willingness

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Speaker 2: for lenders to invest more money in a situation like that.

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Speaker 3: Well, I mean Echo Store obviously was a great result,

352
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Speaker 3: and we know a lot of folks in that they're

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Speaker 3: very happy with the way that turned out. I think

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Speaker 3: in these situations, I do think, Look, all of our

355
00:18:36,320 --> 00:18:38,120
Speaker 3: clients are very savvy. They're not just going to pour

356
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Speaker 3: good money after bad for the sake of doing so.

357
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Speaker 3: And it's a function of in sometimes defensive capital right,

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Speaker 3: protecting your existing investment. I will say I feel like

359
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Speaker 3: on a personal level, just in the stuff I'm working on,

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Speaker 3: I've definitely seen more situations where investors have tapped the

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Speaker 3: brakes on writing the new check because they're concerned that

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Speaker 3: tier point they're just putting good money after bad. And again,

363
00:19:03,440 --> 00:19:07,240
Speaker 3: I think in those scenarios you got to look for context, meaning, well,

364
00:19:07,240 --> 00:19:10,240
Speaker 3: if we don't fund, what does that mean. And if

365
00:19:10,240 --> 00:19:13,280
Speaker 3: the answer is it means a desperate sponsor is going

366
00:19:13,359 --> 00:19:16,000
Speaker 3: to move whatever valuable collateral we have to fund it

367
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Speaker 3: and rip it out of our system, then it may

368
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Speaker 3: bring us back to the table, right, because the alternative

369
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Speaker 3: is not very great for us if it means you're

370
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Speaker 3: putting pressure on junior creditors in the structure or two,

371
00:19:28,720 --> 00:19:31,760
Speaker 3: well what have you and the sponsor to protect themselves

372
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Speaker 3: because the alternative is a bankruptcy where they get wiped out.

373
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Speaker 3: Then that's okay result if you're the senior lender. So

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Speaker 3: the playing board is set. I do think, I mean,

375
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Speaker 3: I don't think anything's changed, right. I think all of

376
00:19:44,480 --> 00:19:48,040
Speaker 3: our clients are extremely savvy and intelligent. They wouldn't just

377
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Speaker 3: write a check for the sake of writing a check.

378
00:19:50,160 --> 00:19:53,159
Speaker 3: I do think people are pressing back more though, on

379
00:19:53,240 --> 00:19:56,600
Speaker 3: situations where the company just comes and expects that the

380
00:19:56,600 --> 00:19:58,640
Speaker 3: senior lenders are just going to solve the problem for them.

381
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Speaker 2: Yeah. And I guess there's certainly example where investors refuse

382
00:20:01,840 --> 00:20:03,520
Speaker 2: to take the haircut, right because again we go back

383
00:20:03,560 --> 00:20:05,680
Speaker 2: to Echo Star Wars, a very complicated situation, but they

384
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Speaker 2: were trying to I think that an agreement to sell

385
00:20:08,840 --> 00:20:11,639
Speaker 2: Dish dbs to direct TV for a dollar, but the

386
00:20:11,680 --> 00:20:14,800
Speaker 2: bond holders were required to were offered to swap into

387
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Speaker 2: a direct TV debt, which obviously would be a big

388
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Speaker 2: improvement and credit quality, but they were required to take

389
00:20:19,920 --> 00:20:22,639
Speaker 2: some very large haircuts depending on the bond and they

390
00:20:22,640 --> 00:20:25,920
Speaker 2: were refuse. I guess with certain cases will lenders be like, hey,

391
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Speaker 2: we're willing to take our chances if this goes bankrupt,

392
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Speaker 2: well restructure and we'll own it throughout the process ourselves.

393
00:20:32,000 --> 00:20:34,400
Speaker 3: Yeah, I think that's very much the case. I mean, obviously,

394
00:20:34,400 --> 00:20:38,400
Speaker 3: without getting into any specifics, viv a situation now where

395
00:20:40,560 --> 00:20:42,480
Speaker 3: we've been there for a while. There's been on again,

396
00:20:42,560 --> 00:20:46,399
Speaker 3: off again discussions with the company and the sponsor. We

397
00:20:46,520 --> 00:20:48,320
Speaker 3: kind of hit pause on an ELM that we were

398
00:20:48,320 --> 00:20:52,160
Speaker 3: talking about months ago. The business has continued to deteriorate,

399
00:20:52,480 --> 00:20:57,160
Speaker 3: and I think the sponsor still is expecting the clients

400
00:20:57,240 --> 00:20:59,600
Speaker 3: to take a haircut. And I think that's a situation

401
00:20:59,680 --> 00:21:02,480
Speaker 3: where it's like, I know what the alternative is. It's

402
00:21:02,520 --> 00:21:04,680
Speaker 3: not great, but it also doesn't make sense for me

403
00:21:04,760 --> 00:21:06,879
Speaker 3: to give back forty cents in my face claim if

404
00:21:06,920 --> 00:21:09,280
Speaker 3: I think this thing is headed towards the bankruptcy. So yeah,

405
00:21:09,520 --> 00:21:12,399
Speaker 3: I mean that's a live deal I'm working on at

406
00:21:12,400 --> 00:21:14,040
Speaker 3: the moment. So I do think you're seeing some of

407
00:21:14,040 --> 00:21:14,600
Speaker 3: that pushback.

408
00:21:15,119 --> 00:21:17,159
Speaker 1: I'll want you look at the secondary market's got I mean,

409
00:21:17,119 --> 00:21:19,440
Speaker 1: in terms of co op versus non co op trading.

410
00:21:19,480 --> 00:21:21,160
Speaker 1: Is that a signal that you look at.

411
00:21:21,720 --> 00:21:23,199
Speaker 3: I mean, we're aware of it, and we have to

412
00:21:23,200 --> 00:21:26,200
Speaker 3: be cognizant of it and candidly when we draw drop

413
00:21:26,240 --> 00:21:29,320
Speaker 3: some of these co ops. You know, sometimes you got

414
00:21:29,320 --> 00:21:31,440
Speaker 3: to spend time with the trading desks on the phone

415
00:21:31,520 --> 00:21:34,199
Speaker 3: just to kind of get them familiar, because obviously the

416
00:21:34,200 --> 00:21:36,560
Speaker 3: clients want liquidity, and so if the co op is

417
00:21:36,560 --> 00:21:41,000
Speaker 3: strangling liquidity, that doesn't help our clients. And you know,

418
00:21:41,080 --> 00:21:43,680
Speaker 3: when we did al Tease right for example, I don't

419
00:21:43,680 --> 00:21:46,719
Speaker 3: think the European traders were too used to or not

420
00:21:46,840 --> 00:21:49,679
Speaker 3: used to it at all, dealing with you know, co

421
00:21:49,760 --> 00:21:52,199
Speaker 3: op versus non co op paper. So we spent enormous

422
00:21:52,240 --> 00:21:55,239
Speaker 3: amount of time trying to educate the desks to make

423
00:21:55,280 --> 00:21:59,760
Speaker 3: it as painful as painless as possible. Sorry painful, but

424
00:22:00,359 --> 00:22:04,639
Speaker 3: I would say we're cognizant of it. Again, I mean,

425
00:22:04,680 --> 00:22:05,800
Speaker 3: I don't know if we're going to get into this,

426
00:22:05,840 --> 00:22:09,359
Speaker 3: but there's multiple flavors of co ops nowadays. So in

427
00:22:09,400 --> 00:22:12,200
Speaker 3: a co op, we're ninety percent, you know, hypothetically of

428
00:22:12,280 --> 00:22:14,159
Speaker 3: the loan is under co op. The trading issue is

429
00:22:14,240 --> 00:22:17,119
Speaker 3: usually not an issue. In a world in which you

430
00:22:17,119 --> 00:22:20,439
Speaker 3: have a you know, fifty percent co op, then you

431
00:22:20,480 --> 00:22:25,160
Speaker 3: have a big trading disparity, and you know, we even

432
00:22:25,200 --> 00:22:29,800
Speaker 3: have some situations that that we recently and something I'm

433
00:22:29,840 --> 00:22:32,000
Speaker 3: involved in which was a head scratcher to me. We

434
00:22:32,040 --> 00:22:34,240
Speaker 3: had people calling us because there was a trading disparity

435
00:22:34,280 --> 00:22:38,560
Speaker 3: between the co op and the Steerco paper, which made

436
00:22:38,600 --> 00:22:40,520
Speaker 3: no sense to me because there was no there's no

437
00:22:40,560 --> 00:22:43,920
Speaker 3: way to delineate Steerco paper in these situations. So yeah,

438
00:22:44,000 --> 00:22:46,840
Speaker 3: I mean it definitely impacts trading. The punchline is if

439
00:22:46,840 --> 00:22:48,679
Speaker 3: we're doing it right, we're trying to make sure it's

440
00:22:48,680 --> 00:22:51,320
Speaker 3: as like what is possible, so it's not a hindrance

441
00:22:51,359 --> 00:22:56,399
Speaker 3: on our client's ability to trade. And trading disparity I

442
00:22:56,400 --> 00:23:00,240
Speaker 3: think is very much a contextualized issue, meaning if or

443
00:23:00,320 --> 00:23:03,200
Speaker 3: seeing a bifurcated deal coming, then there's a trading disparity.

444
00:23:03,200 --> 00:23:05,840
Speaker 3: If everyone thinks that this is a everyone's holding hands

445
00:23:05,840 --> 00:23:08,040
Speaker 3: and getting the same deal, there should not be a

446
00:23:08,119 --> 00:23:08,920
Speaker 3: trading disparity.

447
00:23:09,400 --> 00:23:11,280
Speaker 1: So talk to us about Europe, Scott. I mean, I

448
00:23:11,280 --> 00:23:12,800
Speaker 1: know you spend a lot of time there, and you've

449
00:23:12,880 --> 00:23:15,159
Speaker 1: built up a team there and you you kind of

450
00:23:15,160 --> 00:23:18,439
Speaker 1: have good presence there. When I talked to people in Europe,

451
00:23:18,880 --> 00:23:20,480
Speaker 1: you know, even not that long ago, you know that

452
00:23:20,640 --> 00:23:23,879
Speaker 1: general sense is and I'm paraphrasing and probably crudely breaking

453
00:23:23,880 --> 00:23:27,639
Speaker 1: it down, but Europe is slightly more genteel judges won't

454
00:23:27,640 --> 00:23:29,720
Speaker 1: stand for the shenanigans that you get in the US.

455
00:23:30,440 --> 00:23:33,440
Speaker 1: Management has more exposure to personal liability, there's more concern

456
00:23:33,480 --> 00:23:34,560
Speaker 1: about reputational risk.

457
00:23:34,920 --> 00:23:37,840
Speaker 3: Is that so I definitely think Europe is different. I

458
00:23:37,880 --> 00:23:40,080
Speaker 3: don't think you can take the American model and just

459
00:23:40,160 --> 00:23:42,879
Speaker 3: export it, so I think that's one hundred percent tro

460
00:23:43,000 --> 00:23:45,720
Speaker 3: and as the American I should definitely refer to the Europeans.

461
00:23:46,320 --> 00:23:50,280
Speaker 3: But from my experience, what I've seen is it is

462
00:23:50,320 --> 00:23:54,760
Speaker 3: a smaller sandbox in the sense of at least on

463
00:23:54,800 --> 00:23:57,800
Speaker 3: the lender side, right there's just there's less institutions, So

464
00:23:58,320 --> 00:24:00,000
Speaker 3: it's kind of hard to do one of these bifrikid

465
00:24:00,160 --> 00:24:02,480
Speaker 3: deals when these folks are working with each other in

466
00:24:02,520 --> 00:24:06,159
Speaker 3: every single credit historically, So there's less appetite for the

467
00:24:06,200 --> 00:24:08,600
Speaker 3: lender on lender of violence as it's been coined here.

468
00:24:10,000 --> 00:24:14,960
Speaker 3: And I do think there is reputational risk, but that

469
00:24:15,080 --> 00:24:17,080
Speaker 3: I mean that was the case here as well right

470
00:24:17,160 --> 00:24:19,720
Speaker 3: ten years ago. And I think most of the White

471
00:24:19,800 --> 00:24:22,440
Speaker 3: Chee sponsors, maybe minus one or two, have kind of

472
00:24:22,520 --> 00:24:25,320
Speaker 3: ripped off the band aid because I think they've discovered

473
00:24:25,320 --> 00:24:28,000
Speaker 3: that the markets are forgiving and have a short memory.

474
00:24:29,400 --> 00:24:34,280
Speaker 3: So what I would say is, do I see the

475
00:24:34,640 --> 00:24:37,800
Speaker 3: eleemy stuff moving to Europe? Yes? Do I see it

476
00:24:38,000 --> 00:24:40,520
Speaker 3: in the volume that we have here in the US? Know?

477
00:24:41,200 --> 00:24:45,560
Speaker 3: And do I see the more aggressive transactions that have

478
00:24:45,680 --> 00:24:49,280
Speaker 3: been implemented here in the US, you know, becoming commonplace

479
00:24:49,280 --> 00:24:52,720
Speaker 3: in Europe? Probably not, But I do think if you

480
00:24:52,840 --> 00:24:56,240
Speaker 3: just step back and think about it, same documents in

481
00:24:56,320 --> 00:24:58,919
Speaker 3: large measure, a lot of them are the same sponsors, right,

482
00:24:58,920 --> 00:25:02,240
Speaker 3: It's just their investments up versus the US, and what

483
00:25:02,280 --> 00:25:05,040
Speaker 3: you're seeing is on the same advisors, right, So you're

484
00:25:05,040 --> 00:25:07,280
Speaker 3: getting the same you know, without naming names. You're getting

485
00:25:07,280 --> 00:25:10,600
Speaker 3: the same lawyers and bankers hired in Europe for deals

486
00:25:10,600 --> 00:25:12,760
Speaker 3: that they do here. So it's not surprising that they

487
00:25:12,800 --> 00:25:16,639
Speaker 3: would potentially roll out a playbook that's worked. So it

488
00:25:17,359 --> 00:25:19,640
Speaker 3: remains to be seen. But I don't disagree with your

489
00:25:19,720 --> 00:25:22,600
Speaker 3: your your intro. I think that is very true.

490
00:25:22,680 --> 00:25:24,920
Speaker 1: Are there places that it works better countries?

491
00:25:25,960 --> 00:25:28,240
Speaker 3: Okay? Now, now we're going to get into my my

492
00:25:28,600 --> 00:25:33,040
Speaker 3: knowledge of the various geographies and overall lying fiduciary duties.

493
00:25:33,040 --> 00:25:35,240
Speaker 3: But I mean it is relevant right to your point

494
00:25:35,400 --> 00:25:39,920
Speaker 3: about because look, if someone's looking the challenge in element,

495
00:25:40,080 --> 00:25:42,359
Speaker 3: the first place, you look at the docs, right did

496
00:25:42,520 --> 00:25:46,000
Speaker 3: did they breach a covenant? Did they over blast the basket? Did?

497
00:25:47,040 --> 00:25:49,200
Speaker 3: The reality is you have very smart lawyers on both

498
00:25:49,200 --> 00:25:51,680
Speaker 3: sides of the table. For the most part, that's usually

499
00:25:51,720 --> 00:25:54,679
Speaker 3: a no. You could get creative with an argument, but

500
00:25:54,720 --> 00:25:57,000
Speaker 3: presumably there was room in the documents to begin with

501
00:25:57,040 --> 00:26:00,880
Speaker 3: to at least theoretically move an asset for example. So

502
00:26:01,040 --> 00:26:02,800
Speaker 3: the second place a lot of people go is okay,

503
00:26:02,840 --> 00:26:04,639
Speaker 3: is there a state law claim of action like a

504
00:26:04,680 --> 00:26:08,240
Speaker 3: fiduciary duty type claim or a fraudulent transfer type claim,

505
00:26:08,240 --> 00:26:13,000
Speaker 3: which obviously will vary by jurisdiction. So for example, when

506
00:26:13,000 --> 00:26:17,359
Speaker 3: we did SFRLTAST France and there are a lot of threats,

507
00:26:17,560 --> 00:26:19,639
Speaker 3: you know, as part of the negotiation about moving assets

508
00:26:19,640 --> 00:26:23,280
Speaker 3: away from us, my partner, John Pierre Fargus, who runs

509
00:26:23,280 --> 00:26:27,120
Speaker 3: my French office or my French restruction practice, who's best

510
00:26:27,119 --> 00:26:31,199
Speaker 3: in class there, felt very confident that from a fiduciary

511
00:26:31,240 --> 00:26:35,240
Speaker 3: duty liability standpoint, that that was a hollow threat versus

512
00:26:35,240 --> 00:26:37,000
Speaker 3: here in the US, we would take that threat much

513
00:26:37,000 --> 00:26:43,159
Speaker 3: more seriously. So those type of jurisdictional overlay issues are

514
00:26:43,280 --> 00:26:46,440
Speaker 3: very relevant. Whether it's France or Luxembourg or the UK

515
00:26:46,600 --> 00:26:50,160
Speaker 3: or Germany, it varies by jurisdiction. So yes, that comes

516
00:26:50,160 --> 00:26:53,399
Speaker 3: into play as well. I think the US has, you know,

517
00:26:53,440 --> 00:26:55,919
Speaker 3: the business judgment standards a little bit more protective of

518
00:26:55,960 --> 00:26:56,520
Speaker 3: the boards here.

519
00:26:56,840 --> 00:26:58,840
Speaker 1: But you wouldn't say I'll go to Italy ol Spain

520
00:26:58,880 --> 00:27:01,120
Speaker 1: and we can get away with more stuff. For there's

521
00:27:01,160 --> 00:27:04,000
Speaker 1: not like a target on a particular country where things

522
00:27:04,000 --> 00:27:04,520
Speaker 1: are loose.

523
00:27:05,359 --> 00:27:08,359
Speaker 3: I think there probably is. I won't speak to it

524
00:27:08,400 --> 00:27:11,400
Speaker 3: for obvious reasons, but I think there are certain jurisdictions,

525
00:27:13,000 --> 00:27:15,440
Speaker 3: you know, deferring to my colleagues overseas where they feel

526
00:27:15,560 --> 00:27:18,000
Speaker 3: there's I mean, we talk about these things with our clients. Right,

527
00:27:18,320 --> 00:27:20,800
Speaker 3: if it's in France, you probably can't do X. If

528
00:27:20,800 --> 00:27:22,560
Speaker 3: it's in Germany, you probably can't do Y. If it's

529
00:27:22,600 --> 00:27:25,639
Speaker 3: in Luxembourg, maybe you could do this. So it is

530
00:27:25,720 --> 00:27:28,199
Speaker 3: part of the conversation when we're thinking about how to

531
00:27:28,520 --> 00:27:29,760
Speaker 3: you know, roll forward a transact.

532
00:27:29,880 --> 00:27:32,800
Speaker 1: It's more case by case than you know you're you

533
00:27:32,880 --> 00:27:35,640
Speaker 1: are beefing up massively in one country because you see

534
00:27:35,640 --> 00:27:37,840
Speaker 1: a huge amount of transactions in one place.

535
00:27:38,880 --> 00:27:43,840
Speaker 3: I mean, right now, again from from the American practitioners perspective,

536
00:27:44,560 --> 00:27:47,000
Speaker 3: you know, I'm seeing a ton of distress in France

537
00:27:47,200 --> 00:27:49,920
Speaker 3: and we, luckily for US, we have a great practice there,

538
00:27:49,960 --> 00:27:52,600
Speaker 3: so we're doing a lot of it. So like, are

539
00:27:52,640 --> 00:27:55,480
Speaker 3: we in France in a big way because there's a

540
00:27:55,480 --> 00:27:58,480
Speaker 3: ton of distress? Yes? Is that because we think it's

541
00:27:58,520 --> 00:28:03,880
Speaker 3: a leemy friendly environment? No? Actually, probably the inverse is true.

542
00:28:04,600 --> 00:28:07,760
Speaker 1: So it's also a question of scale. How much does

543
00:28:07,800 --> 00:28:11,800
Speaker 1: that act as a deterrent the deal? The deals relatively

544
00:28:11,920 --> 00:28:13,680
Speaker 1: much smaller than they are in the US.

545
00:28:13,800 --> 00:28:16,119
Speaker 3: Right in the capital structures, yes, yeah, I mean for

546
00:28:16,160 --> 00:28:18,159
Speaker 3: the for the most part, that's true. I mean, but

547
00:28:18,240 --> 00:28:22,480
Speaker 3: if obviously SFR was a massive capital structure. You know,

548
00:28:22,480 --> 00:28:25,200
Speaker 3: it's public that we're involved in multis International, it's another

549
00:28:25,240 --> 00:28:27,840
Speaker 3: massive capital structure. So there are some big ones, but

550
00:28:27,880 --> 00:28:31,080
Speaker 3: you're right, I mean, there's less multi billion dollar structures

551
00:28:31,080 --> 00:28:32,160
Speaker 3: than we deal with here in the US.

552
00:28:32,480 --> 00:28:35,520
Speaker 1: And other than the fact that cop agreements work, which

553
00:28:35,520 --> 00:28:37,680
Speaker 1: you're a big advocate of, what are the lessons do

554
00:28:37,720 --> 00:28:38,600
Speaker 1: we learned from Maltese?

555
00:28:39,840 --> 00:28:42,440
Speaker 3: So, and just to pause on that, I think co

556
00:28:42,520 --> 00:28:45,480
Speaker 3: op agreements are legal to go to a discussion earlier,

557
00:28:46,360 --> 00:28:51,360
Speaker 3: and I think they're appropriate in certain circumstances. I don't

558
00:28:51,400 --> 00:28:53,000
Speaker 3: think that there and I said it earlier, I'll say

559
00:28:53,000 --> 00:28:54,640
Speaker 3: it again. I don't think that they're one size fits all.

560
00:28:54,720 --> 00:28:57,400
Speaker 3: I think there are times sometimes when actually our clients

561
00:28:57,480 --> 00:28:59,320
Speaker 3: want to rush to a co op, where maybe we

562
00:28:59,360 --> 00:29:02,320
Speaker 3: should let things play forward to see if it makes

563
00:29:02,360 --> 00:29:07,360
Speaker 3: sense contextually in that circumstance. In SFR, it made a

564
00:29:07,360 --> 00:29:09,360
Speaker 3: ton of sense to me. That was a little bit

565
00:29:09,360 --> 00:29:12,320
Speaker 3: more of a no brainer. You had a massive capital structure.

566
00:29:12,840 --> 00:29:15,320
Speaker 3: You had a company who came out who basically said

567
00:29:15,440 --> 00:29:18,840
Speaker 3: telegraph they were looking to capture discount. And you had

568
00:29:19,400 --> 00:29:24,920
Speaker 3: lenders within our syndicate who were US holders, Euro holders,

569
00:29:25,000 --> 00:29:27,680
Speaker 3: you had power holders, You had people that bought in

570
00:29:27,720 --> 00:29:30,200
Speaker 3: at a steep discount. So you just had varying degrees

571
00:29:30,240 --> 00:29:34,040
Speaker 3: of thought processes from their own internal perspective. And I

572
00:29:34,040 --> 00:29:38,360
Speaker 3: think had there not been a co op, given the

573
00:29:38,360 --> 00:29:40,280
Speaker 3: size of that structure, it would have been very easy

574
00:29:40,360 --> 00:29:42,840
Speaker 3: for the company its advisors to go pick off large

575
00:29:42,840 --> 00:29:47,280
Speaker 3: holders and do things to pit holders against each other.

576
00:29:47,320 --> 00:29:48,920
Speaker 3: So in that one it made a lot of sense

577
00:29:48,960 --> 00:29:52,040
Speaker 3: to me. No one was looking to do an enemy

578
00:29:52,160 --> 00:29:55,760
Speaker 3: off the backs of someone else, and that deal which

579
00:29:55,760 --> 00:29:58,880
Speaker 3: printed was one hundred percent pro rata. Everyone in the

580
00:29:58,920 --> 00:30:02,560
Speaker 3: secured group got the same deal, So that made a

581
00:30:02,600 --> 00:30:06,520
Speaker 3: lot of sense. In other scenarios where you have really

582
00:30:06,560 --> 00:30:10,880
Speaker 3: big lenders, you know, paper straining as deep discount, they

583
00:30:10,880 --> 00:30:14,080
Speaker 3: may want to put money to work, you know, rushing

584
00:30:14,080 --> 00:30:16,080
Speaker 3: out with a big co op may cut against their interests.

585
00:30:16,440 --> 00:30:18,120
Speaker 1: Just going back to Europe, how's the build out of

586
00:30:18,160 --> 00:30:20,520
Speaker 1: your business going. You've hired some people, you're hiring more.

587
00:30:21,600 --> 00:30:24,760
Speaker 3: Yeah, it's going great. In the US. I mean, we've

588
00:30:24,800 --> 00:30:27,680
Speaker 3: been plugging away for a while and have been extremely

589
00:30:27,720 --> 00:30:30,920
Speaker 3: busy for years. Knock on wood, we haven't you know,

590
00:30:30,960 --> 00:30:35,120
Speaker 3: we haven't had a lull on a on a personal level.

591
00:30:35,280 --> 00:30:39,120
Speaker 3: So two things. One is, obviously the market has changed.

592
00:30:39,480 --> 00:30:41,840
Speaker 3: I've been doing this roughly twenty five years and it's

593
00:30:41,880 --> 00:30:45,080
Speaker 3: changed drastically in the last five and luckily we were

594
00:30:45,280 --> 00:30:48,080
Speaker 3: part of that change as opposed to reacting to it.

595
00:30:48,840 --> 00:30:51,520
Speaker 3: And that is this whole change to eleemy being you know,

596
00:30:52,840 --> 00:30:56,840
Speaker 3: a precursor and sometimes a substitute for a change of

597
00:30:56,840 --> 00:31:00,480
Speaker 3: control type transaction. So you need more lawyers that know

598
00:31:00,520 --> 00:31:02,400
Speaker 3: how to do that work. And it really is finance

599
00:31:02,440 --> 00:31:05,760
Speaker 3: heavy and not all bankruptcy lawyers, certainly when I started

600
00:31:05,800 --> 00:31:09,840
Speaker 3: my career twenty five years ago, were heavily trained to

601
00:31:09,880 --> 00:31:13,880
Speaker 3: focus on every nuance at credit docs at a young age,

602
00:31:14,360 --> 00:31:19,040
Speaker 3: and so we've really changed our training as it relates

603
00:31:19,080 --> 00:31:23,719
Speaker 3: to our up and comers, and also are recruiting. So

604
00:31:23,960 --> 00:31:26,120
Speaker 3: a lot of the hiring I've done in the last

605
00:31:26,560 --> 00:31:30,200
Speaker 3: two years have really been heavy finance folks, not people

606
00:31:30,240 --> 00:31:33,120
Speaker 3: I would call traditional restructuring lawyers, not the folks that

607
00:31:33,200 --> 00:31:34,560
Speaker 3: throw in a suit and tie and go to court,

608
00:31:35,000 --> 00:31:36,920
Speaker 3: but the ones that could dig into a credit agreement

609
00:31:36,920 --> 00:31:39,000
Speaker 3: and come up with a host of options for our clients.

610
00:31:40,160 --> 00:31:43,120
Speaker 3: And I'll continue to we can never have enough bench

611
00:31:43,200 --> 00:31:46,560
Speaker 3: as it relates to people with that skill set. Separately,

612
00:31:46,720 --> 00:31:51,120
Speaker 3: a big personal goal of mine was really to build

613
00:31:51,160 --> 00:31:54,800
Speaker 3: out the European practice because in my mind I could

614
00:31:54,840 --> 00:32:00,840
Speaker 3: see this work that we do here spreading to Europe again,

615
00:32:01,000 --> 00:32:04,920
Speaker 3: not necessarily the same level of intensity or aggressiveness that

616
00:32:04,920 --> 00:32:06,960
Speaker 3: you see in the US, but but versions of it.

617
00:32:08,920 --> 00:32:12,240
Speaker 3: And you know, most of our clients that you know

618
00:32:12,280 --> 00:32:14,720
Speaker 3: we'd rely on here for new work are the same

619
00:32:14,760 --> 00:32:18,120
Speaker 3: people that play in Europe. So to us, it was

620
00:32:18,160 --> 00:32:22,920
Speaker 3: a natural progression to try to continue that relationship overseas. Historically,

621
00:32:23,000 --> 00:32:25,840
Speaker 3: we always had a very deep team in places like France,

622
00:32:25,840 --> 00:32:29,080
Speaker 3: so that was easy. In Europe, we were good, but

623
00:32:29,160 --> 00:32:31,720
Speaker 3: we needed more, I mean honestly, and so we went

624
00:32:31,760 --> 00:32:34,840
Speaker 3: out and we uh and that's a tough market to recruit,

625
00:32:34,880 --> 00:32:37,240
Speaker 3: and I mean it's just it's a small, finite universe

626
00:32:37,280 --> 00:32:42,280
Speaker 3: of people that are super relevant and everyone wants those

627
00:32:42,280 --> 00:32:44,560
Speaker 3: samful of people. So we were able to pull off

628
00:32:45,000 --> 00:32:47,400
Speaker 3: a pretty big acquisition earlier this year. We brought in

629
00:32:48,200 --> 00:32:54,560
Speaker 3: the leader of senc's restruction former snce's restructuring practice and

630
00:32:54,960 --> 00:32:57,680
Speaker 3: finance and a host of associates game with them, which

631
00:32:57,760 --> 00:33:00,120
Speaker 3: was a huge bolster to our group in London. And

632
00:33:00,480 --> 00:33:02,720
Speaker 3: I would say, I'm not done there. There's more to come.

633
00:33:02,880 --> 00:33:04,320
Speaker 1: And more in other countries in Europe.

634
00:33:04,360 --> 00:33:06,920
Speaker 3: Yeah, one hundred percent as well, And there's one in

635
00:33:06,920 --> 00:33:09,640
Speaker 3: particular that will be coming soon. But the jurisdiction is

636
00:33:09,680 --> 00:33:11,280
Speaker 3: so small. Stay away from avoiding.

637
00:33:11,640 --> 00:33:14,720
Speaker 1: But again, if I'm sitting in Milano, Madrid or Frankfurt,

638
00:33:14,720 --> 00:33:16,600
Speaker 1: why why give some done? I mean, why not just

639
00:33:16,640 --> 00:33:19,160
Speaker 1: go to my guy that I've been talking to for decades,

640
00:33:19,200 --> 00:33:21,640
Speaker 1: that you know, speaks my language. He's been sitting there

641
00:33:21,760 --> 00:33:22,480
Speaker 1: from the front of.

642
00:33:22,480 --> 00:33:25,080
Speaker 3: Me, from an advisor front, or from a client front.

643
00:33:24,880 --> 00:33:26,200
Speaker 1: From a you know, if I want to get a

644
00:33:26,240 --> 00:33:27,920
Speaker 1: little fun to do this sort of why do I

645
00:33:27,960 --> 00:33:29,120
Speaker 1: need to go to give some done.

646
00:33:29,280 --> 00:33:31,480
Speaker 3: Well for this sort of work. I mean, my honest

647
00:33:31,640 --> 00:33:33,760
Speaker 3: pitch for that, because I think it rained true, is

648
00:33:33,800 --> 00:33:35,520
Speaker 3: we've just done more of it than anyone else, and

649
00:33:35,560 --> 00:33:38,760
Speaker 3: so there's a certain level of sophistication that we have

650
00:33:39,080 --> 00:33:41,120
Speaker 3: just having dealt with all this stuff for the years.

651
00:33:42,040 --> 00:33:45,720
Speaker 3: And I think if you think about you know, deals

652
00:33:45,760 --> 00:33:49,640
Speaker 3: like Altice, which was an lum in Europe, it was

653
00:33:49,680 --> 00:33:53,200
Speaker 3: a combination of my French practitioners who are best in

654
00:33:53,240 --> 00:33:56,040
Speaker 3: class and kind of know that market in the nuances,

655
00:33:56,120 --> 00:33:59,360
Speaker 3: and then us taking the technology that we've been doing

656
00:33:59,360 --> 00:34:03,520
Speaker 3: here forever and kind of transplanting it with the with

657
00:34:03,600 --> 00:34:06,400
Speaker 3: the benefit of our French partner's you know, advice to

658
00:34:06,400 --> 00:34:09,080
Speaker 3: make sure we're not hitting any guardrails and transplanting it.

659
00:34:09,080 --> 00:34:11,960
Speaker 3: So I think that's you know, the pitch, so to speak.

660
00:34:12,000 --> 00:34:15,200
Speaker 3: I think it's there. There's something that is said if

661
00:34:15,239 --> 00:34:17,719
Speaker 3: you even look at the US market, there's really a

662
00:34:17,760 --> 00:34:20,279
Speaker 3: subset of law firms both on the company and on

663
00:34:20,320 --> 00:34:23,440
Speaker 3: the lender side that do all of this. So I

664
00:34:23,440 --> 00:34:27,600
Speaker 3: think it's it's a natural progression to take that expertise

665
00:34:27,880 --> 00:34:30,360
Speaker 3: and to bring it to your clients overseas.

666
00:34:31,719 --> 00:34:33,879
Speaker 2: And then when when you're representing debt holders and you're

667
00:34:33,880 --> 00:34:36,520
Speaker 2: dealing with a company, is there any difference in the

668
00:34:36,560 --> 00:34:40,160
Speaker 2: type of company, For example, if it's a sponsor private

669
00:34:40,200 --> 00:34:43,439
Speaker 2: equity held equity for the most part, or it could

670
00:34:43,480 --> 00:34:47,000
Speaker 2: be a company that's got a very influential founder like

671
00:34:47,120 --> 00:34:50,120
Speaker 2: we talked about Echo Star with Charlie organ or or

672
00:34:50,160 --> 00:34:52,560
Speaker 2: dealing with a more widely held public company.

673
00:34:53,640 --> 00:34:55,279
Speaker 3: Uh. Yeah, I mean there's definitely a difference in my

674
00:34:55,360 --> 00:34:58,279
Speaker 3: mind between public and private. You know, I don't think

675
00:34:58,320 --> 00:35:02,200
Speaker 3: you've really seen much of any public style le me right,

676
00:35:02,280 --> 00:35:06,799
Speaker 3: because if you think about people's motivations to do these transactions,

677
00:35:06,800 --> 00:35:09,080
Speaker 3: if you're a sponsor of the motivation is pretty obvious

678
00:35:10,719 --> 00:35:13,000
Speaker 3: to do one of these transactions to get more time,

679
00:35:13,200 --> 00:35:16,799
Speaker 3: to hopefully get a return to your LPs, to not

680
00:35:17,200 --> 00:35:20,120
Speaker 3: have to write down an investment, etc. I mean, obviously,

681
00:35:20,440 --> 00:35:22,920
Speaker 3: if you're dealing with the company of public shareholders, I

682
00:35:22,920 --> 00:35:25,960
Speaker 3: mean they're still benefit people are fiduciaries to their public shareholders,

683
00:35:26,400 --> 00:35:29,120
Speaker 3: but you usually don't have like one united voice so

684
00:35:29,200 --> 00:35:32,960
Speaker 3: to speak, pushing in this direction. I do think, I mean,

685
00:35:33,000 --> 00:35:37,160
Speaker 3: we have some stuff in the pipeline and in the

686
00:35:37,200 --> 00:35:40,240
Speaker 3: work so to speak that are public, so we'll see

687
00:35:40,680 --> 00:35:43,400
Speaker 3: if we kind of finally cross that transom. But I

688
00:35:43,440 --> 00:35:47,720
Speaker 3: think for the most part, just given you need another

689
00:35:47,760 --> 00:35:51,440
Speaker 3: party to transact with who's motivated, I do think that

690
00:35:51,480 --> 00:35:53,400
Speaker 3: most of the stuff will stay on the sponsor side.

691
00:35:53,520 --> 00:35:55,719
Speaker 1: I want to ask you it's about the concept of

692
00:35:56,120 --> 00:36:00,919
Speaker 1: m blockers and omni blockers. A recent guest, Sabrina Fox Legal,

693
00:36:00,920 --> 00:36:03,400
Speaker 1: said that they should be on all deals. Essentially, this

694
00:36:03,480 --> 00:36:05,960
Speaker 1: is anti lem language and the documentation saying the borrow

695
00:36:06,040 --> 00:36:09,440
Speaker 1: won't use terms to subordinate lenders kind of umbrella protection

696
00:36:09,480 --> 00:36:11,840
Speaker 1: against the range of lemies. Is that a viable option

697
00:36:12,160 --> 00:36:13,600
Speaker 1: when it catch on to you seeing any of those

698
00:36:13,640 --> 00:36:14,040
Speaker 1: at all.

699
00:36:14,040 --> 00:36:17,520
Speaker 3: Well, there are I mean that's a generic leemy blocker term.

700
00:36:17,560 --> 00:36:21,360
Speaker 3: I mean, if you look at deals nowadays, there's things

701
00:36:21,520 --> 00:36:25,200
Speaker 3: like sort of protection or j crew protection or chew

702
00:36:25,200 --> 00:36:29,359
Speaker 3: WE protection, some of the more famous lemies that are

703
00:36:29,360 --> 00:36:32,920
Speaker 3: out there. And I think it goes to the whole

704
00:36:33,840 --> 00:36:37,000
Speaker 3: commentary we're having before, is like in the syndication process,

705
00:36:37,000 --> 00:36:39,680
Speaker 3: how much leverage do folks have on the front end

706
00:36:39,800 --> 00:36:42,160
Speaker 3: to get those kind of protections in the document. You're

707
00:36:42,160 --> 00:36:44,239
Speaker 3: seeing more and more of them. You're seeing things like

708
00:36:44,320 --> 00:36:47,279
Speaker 3: J crew protection in documents. That being said, right, it's

709
00:36:47,280 --> 00:36:49,480
Speaker 3: a cat and mouse game. You'll see a version of

710
00:36:49,560 --> 00:36:52,759
Speaker 3: J Crow protection and then someone on our team will

711
00:36:52,760 --> 00:36:54,320
Speaker 3: take a look at it and be like, I've figured

712
00:36:54,320 --> 00:36:58,080
Speaker 3: out a way to navigate around it. So I think

713
00:36:58,120 --> 00:37:01,680
Speaker 3: you are seeing some documents on the primary issuing side

714
00:37:01,680 --> 00:37:03,839
Speaker 3: where some of these protections are getting in. Where they're

715
00:37:03,880 --> 00:37:08,520
Speaker 3: really finding their way in is post Lmy. So people say, Okay,

716
00:37:08,920 --> 00:37:11,520
Speaker 3: I'm doing this deal because you have leverage against me,

717
00:37:11,600 --> 00:37:15,319
Speaker 3: because you have this optionality under the document. However, you

718
00:37:15,320 --> 00:37:17,560
Speaker 3: know I'm shutting the door, right. So on the back

719
00:37:17,640 --> 00:37:19,799
Speaker 3: end of this deal, we're going to close everything off.

720
00:37:19,800 --> 00:37:21,439
Speaker 3: We're going to have every protection. We're going to tighten

721
00:37:21,440 --> 00:37:23,080
Speaker 3: down your baskets, we're going to tighten down your r

722
00:37:23,120 --> 00:37:27,239
Speaker 3: peak capacity, et cetera. And So what's interesting is you're

723
00:37:27,280 --> 00:37:30,040
Speaker 3: now seeing a lot of people in the secondary market,

724
00:37:30,080 --> 00:37:32,319
Speaker 3: and I talk to clients all the time that are

725
00:37:32,719 --> 00:37:36,120
Speaker 3: very interested in buying the post Elmy paper in the

726
00:37:36,160 --> 00:37:41,160
Speaker 3: marketplace because that they know is protected paper. Look if

727
00:37:41,600 --> 00:37:46,080
Speaker 3: on the on the front end of an underwriting process,

728
00:37:46,120 --> 00:37:49,359
Speaker 3: if if lenders were able to advocate and get in

729
00:37:49,520 --> 00:37:52,360
Speaker 3: real enemy protections and all these documents, we could just

730
00:37:52,360 --> 00:37:55,440
Speaker 3: go back to being restructing lawyers. I'm not seeing a

731
00:37:55,520 --> 00:37:56,359
Speaker 3: change anytime soon.

732
00:37:56,880 --> 00:37:58,560
Speaker 1: And that hasn't died restructing laws.

733
00:37:58,600 --> 00:38:02,200
Speaker 3: There was a yeah. I rolled my eyes a little

734
00:38:02,200 --> 00:38:04,120
Speaker 3: bit at that. No, I don't think it's died. I

735
00:38:04,120 --> 00:38:07,600
Speaker 3: think the markets changed. My honest view is what's happened

736
00:38:07,719 --> 00:38:10,520
Speaker 3: is instead of this being kind of a one step

737
00:38:10,560 --> 00:38:14,120
Speaker 3: process when you need to recapitalize or fix a business,

738
00:38:14,160 --> 00:38:16,960
Speaker 3: it's almost become a two step process. The lemy comes first,

739
00:38:17,520 --> 00:38:19,960
Speaker 3: and if the enemy sticks, there never is a part two.

740
00:38:20,000 --> 00:38:22,680
Speaker 3: So maybe that kills the restructuring lawyer. But I think

741
00:38:22,880 --> 00:38:25,200
Speaker 3: what we'll probably see over time and time will tell

742
00:38:25,320 --> 00:38:28,239
Speaker 3: is that it won't stick in a decent percentage of

743
00:38:28,239 --> 00:38:30,399
Speaker 3: these and you'll still have the restructure. So so now

744
00:38:30,400 --> 00:38:32,480
Speaker 3: I'm not a I'm not a believer in the line.

745
00:38:32,480 --> 00:38:34,080
Speaker 3: I thought that restructuring lawyers are dead, But.

746
00:38:34,040 --> 00:38:35,719
Speaker 1: The real Senate would just say it's another way of

747
00:38:35,719 --> 00:38:36,920
Speaker 1: the lawyers getting paid twice.

748
00:38:37,600 --> 00:38:40,000
Speaker 3: I mean that it's a cynical look at it, but

749
00:38:40,040 --> 00:38:43,560
Speaker 3: it happens to be true. I mean, it's it's two

750
00:38:43,560 --> 00:38:44,759
Speaker 3: bites at the apple, so to speak.

751
00:38:44,800 --> 00:38:48,440
Speaker 1: If it's required, so talk about the pipeline. You do

752
00:38:48,480 --> 00:38:51,719
Speaker 1: expect these things to come back lemies, you know, is

753
00:38:51,760 --> 00:38:53,920
Speaker 1: it coming back strong in the in the in the

754
00:38:53,920 --> 00:38:56,400
Speaker 1: fourth quarter, does it continue into next year? Do you

755
00:38:56,480 --> 00:38:59,640
Speaker 1: see a good you know, wide range of sectors involved

756
00:38:59,680 --> 00:39:01,040
Speaker 1: in times of businesses?

757
00:39:01,440 --> 00:39:05,600
Speaker 3: Yeah, so I would say it's it's definitely ticking up

758
00:39:05,640 --> 00:39:10,120
Speaker 3: a bit. I think everyone kind of took a deep breath, candidly,

759
00:39:10,120 --> 00:39:11,920
Speaker 3: because I feel like so many of our clients and

760
00:39:11,960 --> 00:39:14,040
Speaker 3: again it's the same players, and all of these deals

761
00:39:14,560 --> 00:39:16,360
Speaker 3: just had one after the other after the other and

762
00:39:16,400 --> 00:39:19,919
Speaker 3: probably had enough, so to speak. I don't think from

763
00:39:19,960 --> 00:39:22,760
Speaker 3: talking to my own clients that they've gone anti eleemy.

764
00:39:24,120 --> 00:39:27,960
Speaker 3: I do think perhaps sponsors have to make a better

765
00:39:28,080 --> 00:39:32,080
Speaker 3: case to the lender community as to why in a

766
00:39:32,080 --> 00:39:34,920
Speaker 3: particular credit it makes sense for them to engage on

767
00:39:35,120 --> 00:39:38,160
Speaker 3: lem I don't think it's just because the debt's trading off,

768
00:39:38,840 --> 00:39:40,560
Speaker 3: So I think there's maybe a little bit more of

769
00:39:40,800 --> 00:39:43,800
Speaker 3: a dance that needs to happen on both sides of

770
00:39:43,840 --> 00:39:48,360
Speaker 3: the table. Yeah, I think there will continue to be,

771
00:39:49,400 --> 00:39:52,160
Speaker 3: you know, a large amount of enemy rolling into twenty five.

772
00:39:52,200 --> 00:39:55,719
Speaker 3: I don't think that's going to change. I don't know

773
00:39:55,800 --> 00:39:59,560
Speaker 3: that it's sector specific per se, but certain sectors which

774
00:39:59,560 --> 00:40:02,560
Speaker 3: are struggling, whether it's chemicals or what have you at

775
00:40:02,600 --> 00:40:07,120
Speaker 3: the moment, are more prone to it just because their

776
00:40:07,440 --> 00:40:10,759
Speaker 3: securities pricings are trading off. Right. So if you have

777
00:40:10,800 --> 00:40:12,520
Speaker 3: a bunch of companies in the same sector and they're

778
00:40:12,520 --> 00:40:14,480
Speaker 3: all trading in the sixties, I think you might see

779
00:40:14,480 --> 00:40:16,960
Speaker 3: a lot of enemy in that particular sector. But I don't.

780
00:40:17,440 --> 00:40:19,040
Speaker 3: I think it has more to do with the trading

781
00:40:19,080 --> 00:40:21,319
Speaker 3: volumes and the trading prices than it has to do

782
00:40:21,400 --> 00:40:25,880
Speaker 3: with you know, advisors, you know, at targeting a particular sector.

783
00:40:26,040 --> 00:40:29,000
Speaker 1: But rolling into twenty six you said twenty five.

784
00:40:29,160 --> 00:40:32,040
Speaker 3: I'm sorry, yeah, finish twenty fifth. It's been a long year. Yes,

785
00:40:32,120 --> 00:40:34,880
Speaker 3: I mean, I think realistically it'll it'll continue to roll in.

786
00:40:34,880 --> 00:40:36,360
Speaker 1: And it's the US, it's Europe, it's.

787
00:40:36,760 --> 00:40:38,960
Speaker 3: I think so I mean, I I us I think

788
00:40:39,040 --> 00:40:41,800
Speaker 3: is is you could take for granted that you'll continue

789
00:40:41,800 --> 00:40:43,880
Speaker 3: to see high volume of enemies here. I think everyone's

790
00:40:43,960 --> 00:40:47,960
Speaker 3: used to it, and sponsors are kind of gotten used

791
00:40:47,960 --> 00:40:52,719
Speaker 3: to it as well, maybe less concerned about the reputational hit. Europe.

792
00:40:52,960 --> 00:40:57,120
Speaker 3: I think you've seen a couple posts SFR, not on

793
00:40:57,160 --> 00:41:00,319
Speaker 3: the same scale or size, So I think think you'll

794
00:41:00,320 --> 00:41:03,839
Speaker 3: continue to see them in Europe again, you know, for

795
00:41:03,880 --> 00:41:05,840
Speaker 3: all the reasons we discussed earlier. Do I think it

796
00:41:05,880 --> 00:41:08,800
Speaker 3: becomes the snowball that is the US now? Do I

797
00:41:08,840 --> 00:41:11,320
Speaker 3: think you'll see more of them with some of the

798
00:41:11,360 --> 00:41:13,120
Speaker 3: same players in Bob, Yes, but.

799
00:41:13,080 --> 00:41:16,280
Speaker 1: You are global, why not Let's time? Why not Africa,

800
00:41:16,360 --> 00:41:17,240
Speaker 1: Middle East? Asia?

801
00:41:17,440 --> 00:41:19,840
Speaker 3: We don't have offices in all those places, so that

802
00:41:19,840 --> 00:41:23,080
Speaker 3: could be the next thing venture Why Yeah, I think

803
00:41:23,160 --> 00:41:26,920
Speaker 3: I think we'll probably we'll stick to to Europe for

804
00:41:27,000 --> 00:41:29,399
Speaker 3: the time being. In the US, I mean, we'll see

805
00:41:29,440 --> 00:41:33,080
Speaker 3: if this becomes becomes a trend anywhere else. But I think,

806
00:41:34,000 --> 00:41:36,839
Speaker 3: you know, in certain of those jurisdictions, it's just restructuring

807
00:41:36,960 --> 00:41:39,920
Speaker 3: per se is not as much of a developed practice

808
00:41:39,920 --> 00:41:41,120
Speaker 3: as it is in US and Europe.

809
00:41:41,600 --> 00:41:44,840
Speaker 1: And basically the aggressive you know, the enemies in the

810
00:41:44,920 --> 00:41:47,479
Speaker 1: US just get more aggressive, do they more cut throat?

811
00:41:47,560 --> 00:41:48,799
Speaker 1: And Europe joins in.

812
00:41:49,600 --> 00:41:51,400
Speaker 3: So I think the opposite is true. I think the

813
00:41:51,520 --> 00:41:54,840
Speaker 3: enemies in the US have actually tried to be more inclusive.

814
00:41:55,160 --> 00:41:57,319
Speaker 3: I mean, you know, without getting into it because we're

815
00:41:57,320 --> 00:41:58,799
Speaker 3: involved in some of them. But if you look at

816
00:41:58,800 --> 00:42:01,360
Speaker 3: like the twenty twenty type transactions during COVID of like

817
00:42:01,440 --> 00:42:03,560
Speaker 3: sort of and Trimark and board riders that were truly

818
00:42:03,600 --> 00:42:08,640
Speaker 3: non Parada, I think the market had shied away from those.

819
00:42:09,960 --> 00:42:16,719
Speaker 3: They've tried to create a a a structure where everyone's

820
00:42:16,760 --> 00:42:21,000
Speaker 3: incentivized to participate. And you know, from our perspective, you know,

821
00:42:21,040 --> 00:42:24,400
Speaker 3: a good enemy is obviously one that staves off a

822
00:42:24,600 --> 00:42:26,759
Speaker 3: change of control in the long term into your you

823
00:42:26,760 --> 00:42:28,839
Speaker 3: know examples of ecro Store and these other ones where

824
00:42:29,040 --> 00:42:31,600
Speaker 3: on the back end there's a recovery and our clients

825
00:42:31,640 --> 00:42:34,440
Speaker 3: do very well economically, that that's the best enemy. But

826
00:42:34,520 --> 00:42:36,120
Speaker 3: I think in the short term, because none of us

827
00:42:36,120 --> 00:42:39,160
Speaker 3: have a crystal ball when when we think about what's

828
00:42:39,160 --> 00:42:42,520
Speaker 3: a good enemy that we just closed, you know, having

829
00:42:42,640 --> 00:42:45,920
Speaker 3: very high take up and participation is is good in

830
00:42:45,960 --> 00:42:48,400
Speaker 3: our minds as advisors at least because it means we

831
00:42:48,480 --> 00:42:51,480
Speaker 3: created a mouse trap that worked that people you know,

832
00:42:51,640 --> 00:42:53,520
Speaker 3: kind of played with. If if you have a huge

833
00:42:53,520 --> 00:42:56,920
Speaker 3: amount of holdouts, probably not a great enemy, and.

834
00:42:56,880 --> 00:42:59,239
Speaker 1: The client understands that and respective that they're don't just

835
00:42:59,239 --> 00:43:01,640
Speaker 1: trying to get every last dollar rounds, but they actually see.

836
00:43:01,719 --> 00:43:04,640
Speaker 3: Oh, they one hundred percent understand the playing field. I mean,

837
00:43:05,160 --> 00:43:07,200
Speaker 3: if you think about it, if fifty percent of you know,

838
00:43:07,320 --> 00:43:10,360
Speaker 3: talking about the fifty percent figure before, fifty percent of

839
00:43:10,360 --> 00:43:12,440
Speaker 3: people just went in the room, cut a deal and

840
00:43:12,520 --> 00:43:15,279
Speaker 3: took all the goodies for themselves, you'd have forty nine

841
00:43:15,280 --> 00:43:18,200
Speaker 3: percent not participating, right, even though they theoretically got a

842
00:43:18,200 --> 00:43:20,640
Speaker 3: better deal. That that's all of our clients are smart

843
00:43:20,719 --> 00:43:23,160
Speaker 3: enough to know that's not that's not a win, that's

844
00:43:23,200 --> 00:43:26,279
Speaker 3: a litigation or even worse, you know, a company just

845
00:43:27,160 --> 00:43:30,720
Speaker 3: faltering and falling down into a bankruptcy. So yeah, clients,

846
00:43:31,200 --> 00:43:33,920
Speaker 3: clients totally get that. You know, you might be able

847
00:43:33,960 --> 00:43:35,640
Speaker 3: to do a little bit better, but you know you

848
00:43:35,680 --> 00:43:37,640
Speaker 3: need to leave enough where people want to participate.

849
00:43:38,560 --> 00:43:41,080
Speaker 1: Great stuff, Scott Greenberg with Gibson done. Many thanks for

850
00:43:41,120 --> 00:43:42,200
Speaker 1: joining us on the Credit.

851
00:43:42,000 --> 00:43:44,600
Speaker 3: Edge, Thanks for having me, Thank you, and.

852
00:43:44,600 --> 00:43:47,200
Speaker 1: Of course very grateful to Steve Flynn with Bloomberg Intelligence.

853
00:43:47,239 --> 00:43:48,280
Speaker 1: Thank you for joining us today.

854
00:43:48,480 --> 00:43:50,319
Speaker 2: Great to be here. Thank you for even more.

855
00:43:50,200 --> 00:43:52,719
Speaker 1: Credit market analysis and insight. Read all of Steve's great

856
00:43:52,719 --> 00:43:55,239
Speaker 1: work on the Bloomberg Terminal. Bloomberg Intelligence is part of

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00:43:55,239 --> 00:43:58,280
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858
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