Court Approves Chapford SMA Partnership, L.P. as Replacement DIP Lender in GWG’s Chapter 11 Cases

On July 18, 2022, Chapford SMA Partnership, L.P. received final approval from the United States Bankruptcy Court for the Southern District of Texas to become a replacement debtor in possession (“DIP”) lender for GWG Holdings, Inc. (“GWG”) and its debtor subsidiaries in their chapter 11 proceedings. In addition to the replacement DIP facility, this Chapford-sponsored investment vehicle entered into an option agreement giving GWG the right to sell its life settlement portfolio to the investment vehicle for $610 million pursuant to a fully-negotiated APA and requiring GWG to designate the investment vehicle as “stalking horse” bidder in any sale process should it choose to pursue a sale of its portfolio. Cravath is representing Chapford SMA Partnership, L.P., in connection with the DIP financing and option agreement.

The Cravath team includes partners George E. Zobitz and Paul H. Zumbro, practice area attorney Alexander Gerten and associates Esther Kang and John A. Marcin on financial restructuring and reorganization matters; partner Matthew L. Ploszek and associates Saagar Kaul and Zachary B. Ramirez-Brunner on M&A matters; partner Arvind Ravichandran and associate Duncan H. Hardell on tax matters; and of counsel Christopher J. Kelly on banking matters.