Orrick, Herrington & Sutcliffe LLP
01/08/2025 | Press release | Distributed by Public on 01/08/2025 09:35
Lane Gate Advisors Plays Key Role in Acclivity Chapter 11
Lane Gate Advisors LP served as the DIP lender and plan sponsor in the Chapter 11 cases of Acclivity West and Acclivity Ancillary Services (Acclivity).
A cross-practice Orrick team advised Lane Gate.
THE COMPANIES
Lane Gate is a boutique investment management advisor focused on segments of the specialty finance market, including life settlements.
Acclivity buys life settlement contracts and sells factionalized interests in the death benefit of those policies to investors.
THE IMPACT
In 2020, Acclivity faced a liquidity crisis after depleting their cash reserves paying premiums on the underlying life insurance policies and defending litigation from former sales agents and investors.
Lane Gate extended rescue financing to Acclivity then to prevent the lapse of Acclivity's life insurance policies. Lane Gate also offered Acclivity's investors an opportunity to swap their fractionalized life settlement interests for a membership interest in Acclivity, which would exchange its policies for an interest in a Lane Gate fund.
In 2023, Acclivity and Lane Gate agreed to pursue a pre-negotiated bankruptcy, funded by a DIP loan from Lane Gate, to cut off liability from litigation, restructure Acclivity's remaining fractionalized life settlement contracts and provide for the repayment of Acclivity's obligations to Lane Gate in a new five-year exit facility.
Acclivity filed bankruptcy on January 5, 2024. Following an objection to confirmation of Acclivity's plan of reorganization by former sales agents, Acclivity's path to emerge from bankruptcy was in jeopardy.
With Orrick's strategic guidance, Acclivity's counsel sought, and was granted, summary judgment disallowing the objectors' claims and paving the way to confirmation of Acclivity's plan of reorganization with the support of more than 90% of Acclivity's creditors.
Orrick guided the parties through the closing of the new exit facility and Acclivity emerged from bankruptcy on December 18, 2024.
THE TEAM
Raniero D'Aversa, Adam Ross and Khai LeQuang led an Orrick team advising Lane Gate that included Nick Sabatino, Ramon Galvan and Jenna MacDonald Busche.