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Credit Cards, Enterprise Risk & Bankruptcy

Davis Wright Tremaine has been advising issuers of co-branded and private-label cards in connection with workouts and bankruptcies involving their key card partners since the early 1990s. Today, as soft-goods chains, airlines and other major card partners face very difficult economic circumstances, you can put this experience to work to protect the interests of your institution.

Our long experience in drafting and negotiating co-branded and private-label card program agreements, representing creditors in bankruptcy proceedings, and most significantly in the intersection of card programs and bankruptcies, makes us uniquely qualified to help issuers custom-tailor strategies to mitigate the credit and bankruptcy risks associated with financially distressed card partners. In addressing your unique needs, we’ll draw on broad and deep experience in key practice areas and focus on providing responsive, efficient service.

Program agreement assessment and amendment
Davis Wright Tremaine lawyers have spent many years structuring, negotiating and documenting hundreds of co-branded and private-label partnerships. We’ve helped numerous issuers identify and address the structural, credit and related risks inherent in program agreements. We also work with issuers in distressed-partner situations to devise appropriate risk mitigation strategies, including amendments and credit enhancement mechanisms. You can count on us to work with you to carefully assess your needs and efficiently develop an approach that works best for you.

Our engagements have covered many industries, including air travel, various retail sectors (such as soft goods, home improvement, electronics, jewelry, furniture and white goods), HVAC, chemicals and software distribution systems. Our lawyers have particular experience representing issuers in connection with rewards programs operating in the Chapter 11 environment. In addition, we’ve counseled numerous acquirers, as well as private-label issuers and other closed-loop issuers, on the special bankruptcy risks created by their agreements.

Corporate restructuring and bankruptcy
If the condition of a distressed card partner turns from bad to worse, we are there for our clients to provide advice on options with respect to how executory contracts are treated in bankruptcy. We also represent issuers in DIP financing/program agreement negotiations and documentation, as well as in-court bankruptcy proceedings, including both first-day orders and follow-on proceedings. Additionally, we counsel card issuers in connection with setoff, recoupment and preference exposure. Our recent card- and non-card-related bankruptcy matters have involved airlines, aerospace, manufacturing, professional services, telecommunications, technology and many retail sectors. Whether our clients are involved in out-of-court workouts and restructurings, sales of distressed businesses, or consensual or litigated Chapter 11 cases, they rely on us for the experience they need to achieve the best possible outcome.

Responsive, flexible service
You need knowledgeable, experienced and responsive counsel to plan for and navigate the bankruptcy of a major card partner. We are uniquely qualified to provide such counsel: Our team knows the credit risks inherent in program agreements, understands the importance of these matters to card issuers, and is committed to giving you the best service possible in the most efficient way.