Private Equity Firms Are Finding New Ways to Curb Creditor Power

Private equity firms are finding new ways to keep a tighter grip on portfolio companies if they get into financial distress.

They’re adding new provisions to debt documents to curb creditor voting rights, and are also pushing back against so-called cooperation agreements between lenders. These proactive measures by buyout firms come as they strive to maintain the power they’ve been gaining in the past decade as lender protections weakened.

Blackstone Inc. has at least twice added terms in recent debt sales by portfolio companies to limit the voting rights of any single holder in future credit decisions, according to ...