Blog Post
Octus on Credit: Disqualified counsel provisions seek to block lender counsel in US debt docs
Julian Bulaon, Head of Liability Management Coverage
2025 has been a standout year for LME dealmaking innovations, with a wave of new terms intensifying the arms race between sponsors and lenders.
Following Better Health and Oregon Tool, whose novel “extend and exchange” structures set a new precedent for non-pro-rata transactions, the focus of LME innovation has shifted toward “controlling the vote”. Recent sponsor strategies have included attempts to insert anti-cooperation provisions, borrower-friendly disqualified lender mechanics, assignment caps, and other terms designed to hinder creditor coordination. Lenders have pushed back against these tactics, with varying degrees of success.
The latest battle is over so-called disqualified counsel provisions, which allow borrowers and sponsors to bar certain law firms from representing lenders. These have recently surfaced in negotiations for both private credit and broadly syndicated facilities.
In this week’s coverage, Octus’ reporters and legal analysts deliver a timely, comprehensive look at how disqualified counsel provisions operate and what the market is saying about them.
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