Executive Summary
November 7, 2022 - Term loan Bs or TLBs
are term loans made to corporate entities and syndicated through a
bank agent to a group of institutional lenders. The U.S.
Court of Appeals for the Second Circuit is considering whether
these loans are “securities” subject to state and
federal securities laws under the decision of the U.S. Supreme
Court in Reves v. Ernst & Young. The outcome
could have a profound effect on all market participants in the
syndicated loan market, including private fund managers that employ
strategies in the credit space and borrowers seeking continued
liquidity during the current bear market.
Background
In April 2014, approximately 70 institutional investor groups
purchased $1.775 billion in then- outstanding debt obligations of
Millennium Laboratories LLC (“Millennium”) from a group
of lenders, including JPMorgan Chase Bank. In November
2015, Millennium filed for bankruptcy. The investors'
claims against the lenders
