Fifth Circuit Rejects Bid to Rehear Serta Debt Transaction Case

A federal appeals court declined to rehear a December ruling stemming from the bankruptcy of Serta Simmons Bedding LLC that has reshaped approaches to corporate debt liability management deals.

The US Court of Appeals for the Fifth Circuit’s New Year’s Eve decision struck down an “uptier” debt transaction between Serta Simmons and a group of the bedding manufacturer’s preferred lenders. A three-judge panel held at the time that Serta breached an “open market purchase” provision of its credit agreement by privately tapping a subset of its existing lenders to raise fresh funds instead of going to the secondary market for ...