Article
Certain CDK Global Creditors in Talks With Law Firm on Potentially Forming Separate Group
Certain CDK Global creditors not treated as initial parties to a cooperation agreement prepared by the advisors to an existing ad hoc group are in discussions with the law firm Cadwalader, Wickersham & Taft about potentially forming a separate group, according to sources.
Octus previously reported that Gibson Dunn and Houlihan Lokey, as advisors to an ad hoc group of CDK Global creditors, informed debtholders on April 24 that a previous deadline to join a cooperation agreement had been scrapped, and instead only the first creditors who sign on to the co-op until a cap of 13.5% of total debt has been reached will have initial party status.
The lender group’s advisors initially set a Tuesday, April 28, deadline for investors to join the united front when the co-op was circulated last week, which had become effective already when a steerco that owned a majority of the debt agreed to the pact. Any creditor who signs on after the 13.5% limit is reached will be a subsequent party to the co-op.
Octus reported last week that CDK is working with Weil Gotshal and PJT Partners to engage with its creditors and evaluate options for its balance sheet, including a liability management exercise.
The Brookfield Business Partners-backed software provider to auto dealerships and manufacturers settled two lawsuits regarding antitrust matters and has at least three other ongoing lawsuits related to competition and a 2024 cyberattack.
On April 24, CDK Global moved for partial summary judgment in Tekion’s dealership management system, or DMS, software antitrust suit, arguing that the competitor cannot show that CDK holds monopoly power in the DMS market or that the market is protected by significant barriers to entry. A hearing on the motion is scheduled for June 11.
An estimate of the company’s capital structure as of March 31, 2025, is shown below:
CDK’s $755 million 8% first lien notes are currently trading at 54.993, according to MarketAxess.
CDK Global, sponsor Brookfield Business Partners and the advisors involved did not respond to requests for comments.
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