Funds Talk: July 2020

Topics covered in this issue include:

• Certain Considerations Associated with a Limited Partner Default in a Private Equity Fund
  Many public and private market participants predict the economic effects of the COVID-19 crisis will be long term and widespread. In this regard, now may be a good time for sponsors of PE Funds to consider the impact the crisis may have on its PE Funds arising out of certain likely effects on PE Fund investors.
  
  

• Justice Department Releases Updated Guidance on Corporate Compliance Programs
  The U.S. Department of Justice has released updated guidance used by federal prosecutors in evaluating whether a company’s compliance program is effective. In this alert, we summarize the main changes to the guidance that companies should heed as they design and revise their compliance programs in the age of COVID-19. 
  
  

• The Importance of Settling on Distressed Documents as Default Rates Increase
  The vast majority of U.S. bank loans that trade in the secondary market settle on either par or distressed forms published by the Loan Syndications and Trading Association. The distressed forms offer significantly more protection for buyers of bank debt, including representations, warranties, and indemnities specifically designed to guard against certain credible risks inherent in a restructuring or a bankruptcy proceeding.
  
  

• Decoding Derivatives — Q2 2020
  Our Decoding Derivatives blog highlights key market developments affecting trading strategies that we see as most relevant for investors in the credit and derivatives markets.
  
  

• Federal Reserve Board Opens Main Street Lending Program Lender Registration and Provides Additional Guidance for the Program
  Interested lenders may now register under the Main Street Lending Program, through the lender registration portal, by submitting the Main Street Lending Program Lender Registration Certifications and Covenants and related wiring instructions to MS Facilities LLC.