Serta’s Controversial Debt Deal Reversed By Appeals Court (2)

Apollo Global Management Inc. and other financial heavyweights that were excluded from an “uptier” debt transaction between Serta Simmons Bedding LLC and competing lenders won an appeals court battle to overturn the deal.

The opinion is a significant development in a controversial debt liability management deal that shifted repayment priority among Serta’s lenders and was a central issue in the bedding company’s 2023 bankruptcy. The decision provides key appellate court guidance over the viability of a type of liability management deal that’s spurred heated lender-on-lender disputes, and it may be significant for the secondary debt markets.

The 2020 uptier ...