Private Credit Wants a 100-Day Plan in When Taking the Keys, Says FTI’s Del Genio

By Geoff Burrows

If private lenders have to take over company ownership in light of deteriorating performance or sponsor reticence, they want to be ready from the opening whistle, says Robert Del Genio, senior managing director at FTI Consulting.

As the private credit markets strain from AI uncertainty and overlevered capital structures, sponsors, lenders and their advisors are refining the playbook for change-of-control situations. Mandates for financial advisors such as FTI vary, but when lenders prepare to take the keys, they are tapping advisors to develop transition plans that are “almost similar” to those seen in business carve-outs, Del Genio notes.

Several private credit-backed companies have tapped restructuring advisors in recent months to prepare for all outcomes, including debt-for-equity swaps. A month ago, Medallia announced that its lenders Blackstone, Apollo and KKR were taking ownership of the customer experience company, confirming Octus’ report from April. Earlier this month, Curia Global announced that Apollo was set to take majority control of the pharmaceutical company in a debt-for-equity swap, confirming an Octus scoop from May.

While not every situation results in a change of control, Del Genio himself has been involved in several situations in which sponsors realize it makes economic sense to hand the keys over to lenders. “An orderly transition out of court is better for the lenders,” he said, adding that sponsors are keen to preserve the strong ties between private equity and private credit.

Sponsors and private lenders are also refining their playbook to address stress in their portfolios without handing over the keys. With companies under scrutiny as they look to grow into their capital structures and fend off AI concerns, sponsors such as Thoma Bravo have embraced private credit providers trading holdings to develop lender groups with long-term conviction, Octus reported last week. Thoma Bravo-backed Coupa Software, Anaplan and Jeppesen are among the companies “market makers” are shopping between lenders to manage software exposure, as reported.

The development of private credit trading also benefits lenders that are facing pressure from rising business development company, or BDC, redemption requests, allowing them to lower software exposure by resizing their holdings. For the latest coverage of redemption requests, read Octus’ BDC News and Analysis.

Yet, some of those funds facing redemption requests are also raising capital elsewhere. “They are still raising new capital,” Del Genio said, adding, “It is an asset class that institutional investors and patient retail investors are still holding in their portfolio.”

In the event an investment worsens, however, asset managers, assisted by their advisors, are ready to change from lender to equity ownership by developing growth strategies, improving working capital and assessing management teams.
 

Global Liability Management Quarterly

The latest edition of our global liability management quarterly discusses the latest developments in Optimum Communications’ deal-away transaction, Cable One’s attempt to rush a coercive exchange, Grupo Antolin’s coercive bank-led restructuring proposal, Synthomer lenders’ uptier and collateral grab and KWG’s offshore restructuring.

The report concludes with a table summarizing select aggressive liability management exercise, or LME, transactions covered by Octus during the quarter, which are now also available on Credit Cloud. The LME quarterly can be found HERE, while the LME transaction database can be found HERE.

Octus First Day Midyear Review

Octus First Day Intelligence reviewed chapter 11 filings in the first half of 2026, revealing that cases in the first half saw a decrease in $1 billion chapter 11s compared with the last few years and a high freefall rate for filings ranging from $100 million to $1 billion. There was a bankruptcy court filing district shakeup: Filings outside the historical top five are at an all-time high amid a retreat from Delaware for billion-dollar filings.

Trade policy has gone from a nonfactor in 2024 to a leading driver of distress for filings with more than $1 billion in liabilities. Approximately 43% of filings in this liability range, in which the consumer discretionary sector was most active, reported tariff concerns in their first day briefings. Read the Midyear Review HERE.

Americas Court Opinion Review

In the latest installment of the Court Opinion Review, we discuss the DISH DBS/DISH Wireless “prepack” plan, the bullet dodged by the LME market in Serta, Trinseo’s attacks on minority lender CastleKnight and a curious equal treatment maneuver in QVC. Read the Court Opinion Review HERE.

Hughes Satellite Systems Corp.

EchoStar subsidiary Hughes Satellite Systems Corp. may file for chapter 11 bankruptcy protection as soon as next weekend. The entire $1.4 billion funded capital structure of Hughes matures on Aug. 1. Since June 19, the company’s secured notes have declined by nearly 12 points to 75.3 from 87.2 while its unsecured notes have fallen to below 50 from 63.5 over the same period of time. Octus’ coverage of Hughes Satellite Systems is HERE.

JetBlue

JetBlue Airways Corp. has scheduled an Aug. 3 meeting with creditors to discuss balance-sheet issues, capital allocation and to take questions. The publicly traded airline has been facing financial difficulties, including losses due to intense industry competition and rising jet fuel prices, exacerbated by the Iran war. JetBlue has faced financial challenges since raising over $2.5 billion against its loyalty program assets in 2024, with more than $1.5 billion in cash burn and continued unprofitability. Octus’ coverage of JetBlue is HERE.

Foundever

Privately held call center operator Foundever launched its LME, which features a $225 million new-money injection from the Mulliez family in exchange for maintaining a close to 40% stake in the company. The transaction is expected to reduce debt by $900 million, resulting in a 2.5x gross leverage decline. Lenders needed to consent to the transaction by today, July 24, in order to receive a 10% paydown. Lenders will also share 35% of the equity and SteerCo lenders will receive an extra 5%.

In addition, SteerCo lenders will have 67.5% of their debt reinstated, while non-SteerCo lenders will get 57.5% of their debt reinstated. Benoit Leclercq will serve as interim CEO of Foundever, with the call center operator’s founders Laurent Uberti and Olivier Camino set to depart the company today. Octus’ coverage of Foundever is HERE.

AMC Entertainment

Deutsche Bank hosted a fireside chat with AMC Entertainment CEO Adam Aaron, as well as a screening of Christopher Nolan’s new action-fantasy film “The Odyssey” for investor clients at an AMC movie theater in New York. The event came on the same day the movie theater chain reported record quarterly adjusted EBITDA and revenue. AMC could return to market for a comprehensive refinancing before March 2027, considering a special 102 call provision on the company’s Odeon term loan. Octus’ coverage of AMC Entertainment is HERE.
 

Smartbear Software

An ad hoc group of lenders to SmartBear Software is working with Milbank as legal advisor as the company’s debt prices declined ahead of the company’s 2028 debt maturity. Jointly backed by Francisco Partners and Vista Equity Partners, the provider of software development tools faces intense competition in the software testing, API management and developer-tooling markets. The average price for the company’s $524 million term loan due March 2028 has declined to 70.50 from 93.91 cents on the dollar in January, according to Solve. Octus’ coverage of Smartbear Software is HERE.

Gainwell

Some lenders to privately held Gainwell Technologies have sought advice from Davis Polk ahead of the company’s upcoming debt maturities in October 2027. The lenders wanted to be prepared in case a refinancing does not materialize for the Veritas Capital-backed provider of digital and cloud-enabled services for health and human services program administration and operations, but many investors expect that the company will launch a refinancing, especially considering that the first lien loan is indicated at about par. Octus’ coverage of Gainwell is HERE.

Dye & Durham

An ad hoc group of minority lenders to Dye & Durham has organized with the law firm Hogan Lovells Cadwalader. The legal tech provider has been contending with higher leverage, weak cash flow and declining revenue, while management turnover in the past year has added to its woes. The company last year had requested to waive a default arising from failing to file its financials on time for fiscal year 2025. Octus’ coverage of Dye & Durham is HERE.

Connectwise

Some Connectwise lenders have sought advice from lawyers Akin Gump on the managed IT services provider’s debt documents ahead of maturities in 2027 and 2028. Investors in the Thoma Bravo-backed company are preparing for potential discussions needed with the company about extending the maturity in 2028 if it fails to refinance with private credit, broadly syndicated loans or bonds. Proactive lender actions stem from general concerns that AI advances would cut existing software companies’ revenue and profitability. Octus’ coverage of Connectwise is HERE.
 

DISH DBS and DISH Wireless

On July 23, Judge Christopher M. Lopez announced that he will conditionally approve the DISH DBS and DISH Wireless debtors’ disclosure statement for solicitation, subject to specific additional disclosures. However, Judge Lopez said that he will not approve the debtors’ proposed confirmation timeline, with a confirmation hearing on Sept. 14. The judge suggested an Oct. 6 confirmation hearing date instead.

Tower lessors Crown Castle and American Tower (which assert more than $5 billion in disputed claims against the DISH Wireless debtors), a 40-strong group of smaller lessors and the official committee of unsecured creditors opposed DS approval, arguing that objections to an $8.8 billion intercompany claim against DISH Wireless held by a trust for the benefit of DISH DBS bondholders should be resolved before solicitation. The court instructed the debtors to add language detailing the intercompany claim allowance and voting disputes to DISH DBS noteholders’ ballots. Octus’ EchoStar coverage is HERE.

Trinseo plc

At a hearing on July 22, Judge Christopher Lopez took under advisement the motions of the Trinseo debtors and their senior lenders to dismiss the CastleKnight-led excluded OpCo term lenders’ suit challenging the intercompany claims created by the company’s 2023 double-dip and 2025 refinancing transactions as well as the debtors’ separate motion alleging violations of the automatic stay for bringing the action.

The judge did not indicate the timing of his ruling, but the debtors’ confirmation hearing is scheduled to begin on Aug. 12. Without revealing which way he was leaning, Judge Lopez urged the parties to “fight and talk at the same time.” Octus’ Trinseo coverage is HERE.

GoHealth Inc.

On July 20, Judge Thomas M. Horan confirmed the GoHealth debtors’ prepackaged chapter 11 plan at a largely consensual hearing, overruling one remaining objection from a former employee and holder of Class A common stock. The plan went effective on July 22, with the company emerging as a private company owned by first lien lenders.

Superpriority term loan claims will exchange into a $173.9 million second-out term loan, and the first lien claims will exchange into a $588.3 million third-out term loan plus 100% of the new equity in the reorganized company, subject to dilution by a management incentive plan. A new $20 million first-out exit facility is funding a $10.3 million cash recovery pool distributed pro rata to Class A common equityholders and GoHealth Holdings interests. All three exit tranches will mature July 17, 2031, and carry term SOFR+550 bps. General unsecured creditors and preferred equity are unimpaired. Octus’ GoHealth coverage is HERE.

Northern District of California Judge Araceli Martínez-Olguín granted 12 states’ request for a temporary restraining order halting Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery. The judge set a hearing for the states’ motion for preliminary injunction for Aug. 3, however the parties are conferring on whether to agree to set a later hearing date. Octus’ coverage of Warner Bros. and Paramount is HERE and HERE.

The Office of the U.S. Trade Representative imposed 10% to 12.5% tariffs on 60 trading partners following a section 301 tariff investigation into forced labor practices. The tariff rates largely match those the USTR proposed on June 2, which generally tied rate amounts to a country’s prohibitions on imports reliant on forced labor. Also this week President Donald Trump announced that the United States will implement additional 50% tariffs on certain Canadian goods “in response to Canada’s discriminatory treatment of American products.” Octus’ tariff coverage is HERE.