Apollo’s Debt-Lawsuit Defeat to Reshape Wall Street Risk Models
- Ruling can give borrowers upper hand in debt restructurings
- Fight hinges on how many creditors are allowed to jump in line
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When Apollo Global Management Inc. and its allies sued struggling mattress maker Serta Simmons Bedding for giving an unfair advantage to creditors providing fresh cash, many on Wall Street snickered.
Apollo has earned a reputation over the years for cutting distressed-debt deals that hurt existing creditors, and some bankers delighted in the role reversal. But when the private equity giant and partners including Angelo Gordon & Co. lost the lawsuit, the snickering stopped.