Ad Hoc Bondholder Committee in SAS Chapter 11 Cases

Cleary Gottlieb represented an ad hoc committee of bondholders (the AHC) holding Swedish-law-governed commercial hybrid bonds issued by SAS AB (SAS) in connection with the Chapter 11 filing of SAS and certain of its affiliates (the debtors).

Cleary advised the AHC on a wide range of matters in connection with the debtors’ Chapter 11 cases and SAS’s Swedish restructuring process, including negotiating a forbearance agreement with the debtors as well as various extensions thereto, analyzing the debtors’ DIP financing arrangements and equity solicitation process, reviewing the debtors’ Chapter 11 plans, preparing and evaluating various settlement proposals with the debtors, and coordinating with local counsel, Gernandt & Danielsson Advokatbyrii KB, to litigate certain issues in SAS’s Swedish restructuring process.

On March 22, 2024, the U.S. Bankruptcy Court for the Southern District of New York confirmed the debtors’ Chapter 11 plan. Due to the fact that, among other things, the commercial hybrid bonds held by the AHC could not be compromised other than in accordance with Swedish law, SAS sought approval of its restructuring in a Swedish restructuring process in the Stockholm District Court. Intertrust (Sweden) AB (Intertrust), acting as the agent for the commercial hybrid bonds pursuant to a written procedure supported by the AHC, challenged various aspects of the plan affecting the recoveries for holders of commercial hybrid bond claims. The debtors and the AHC were ultimately able to resolve the disputes between them, with Intertrust withdrawing its outstanding litigation against SAS’s restructuring in Sweden. The Debtors’ plan became effective on August 27, 2024.