Serta Hedge Fund Lenders Spar at Fifth Circuit Over Uptier Deal

A group of hedge fund lenders excluded from an “uptier” debt transaction to Serta Simmons Bedding LLC warned a federal appeals panel that, if a bankruptcy court decision is upheld, it could “blow up” the idea of pro rata sharing rights for lenders.

Serta’s lenders that were excluded from a key 2020 debt restructuring deal urged the US Court of Appeals for the Fifth Circuit at oral argument Wednesday to reverse a Houston bankruptcy court ruling that gave the thumbs up to the bedding company’s deal. Serta in the deal won a cash infusion from some previous lenders who were ...