Optimum's Shot Across The Bow: An Antitrust Challenge To Cooperation Agreements

What You Need to Know

Key takeaway#1

The complaint, one of the first of its kind, is an attempt to apply traditional antitrust principles to fairly new Cooperation Agreements, which have grown increasingly common in the leveraged finance industry.

Key takeaway#2

While the complaint articulates several anticompetitive effects, defendants are likely to preview many procompetitive justifications for Cooperation Agreements in their forthcoming motion to dismiss.

Key takeaway#3

Lenders should ensure that their Cooperation Agreements are structured according to the best practices outlined below to minimize undue antitrust risk.

Seeking to protect their investments in the face of increased liability management exercises, lenders began signing "cooperation agreements," which required the lenders to cooperate when negotiating to restructure existing debt or provide new debt to their shared borrower. These cooperation agreements protect lenders from