Eat, sleep, drive — Breaking down the Del Monte, Serta & American Tire trifecta

Judge Lopez’s Serta ruling lands after Del Monte and American Tire, putting pro rata sharing, sacred rights and LME damages back in the spotlight.

Ropes & Gray’s Rachel Strickland and Eliza Hollander join 9fin Head of LMEs Jane Komsky to parse what these three cases mean for the future of in-court and out-of-court restructurings.

The trio compares Judge Lopez, Judge Kaplan and Judge Goldblatt’s approaches to similar pro rata sharing language in very different settings: Serta outside bankruptcy, and Del Monte and American Tire inside Chapter 11, both with DIP fights.

Strickland and Hollander examine whether roll-ups, cashless exchanges and DIP subordination should be treated as payments or reductions under legacy credit agreements, and why Fifth Circuit open-market purchase analysis continues to shape the debate. They also dig into ratable-offer mechanics, Serta-style uptiers, excluded lender remedies, par participation damages and the tension between textual contract interpretation and bankruptcy court equity.

They also explore whether LME fatigue, litigation costs and the 2027-2028 maturity wall will push market participants towards ratable structures or efficient Chapter 11s.

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