Creditor Corner
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Your weekly curated content from the Creditor Rights Coalition
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?In this Week's Creditor Corner
QVC's confirmation raises the stakes in forum selection for high-stakes litigation, how Dish may be using the same playbook, Legal fees in the stratosphere, Altice game of thrones, More on Serta and Delmonte, and much, much more...
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Featured Content
Bruce Richards on the Markets
Is AI inflationary or deflationary?
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One Man's Take...
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On QVC Confirmation
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“Houston….. we have problem.”
By Andrew Hain
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In a 100+ page opinion, Judge Perez, sided with debtor, QVC, that an insider settlement of $400mm between separate and distinct debtor entities was “reasonable.” In our opinion, it was anything BUT reasonable. During testimony in June, it was made clear to everyone,
except Judge Perez, that the Parent Co. independent director (Mr. Metzler), appointed by debtor’s counsel, failed to negotiate in good faith and failed to utilize ANY tools (including expert advice, valuation analysis, liability analysis) at his disposal in during negotiations with his peers appointed at the subsidiary level. Counsel for the preferreds, Andrew Glenn, essentially got Mr. Metzler to admit that he “rolled over and played dead” during these negotiations. This can not be the “standard” for a reasonable settlement. The “potential liabilities” alleged at the subsidiary level against the Parent were primarily a $1.5 billion tax claim from the IRS and the recoupment of over $400mm in dividends paid almost four years ago in 2022. Oddly, as we sit here at confirmation the IRS has yet to show up in court and file ANY claim in this Chapter 11 case, yet Judge Perez would have us believe this potential liability is an existential threat to the Company. Further, at the time of the dividends the Company received a solvency opinion from Duff & Phelps. Yet, Judge Perez, assumes this solvency opinion could be successfully challenged even though the Company made several financial
moves post the dividend which essentially proved its solvency – including the repayment of almost $2.0 billion in debt. The decision is sure to be appealed, perhaps as early as today.
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The next shoe to drop?
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wow...
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Our take:
Bankruptcy costs continue to rise—but the magnitude surprised even us. As restructurings become increasingly expensive, the question is no longer whether professional fees are high, but whether Courts will step in when market discipline is lacking.
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Who Won Q2?
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Our take:
LMEs have entered the mainstream, with more than 40% of recent transactions involving non-sponsor-backed companies, suggesting there may no longer be any safe places to hide. At the same time, we continue to see a shift toward more "pro rata" and consensual transaction structures, as well as an evolution away from traditional debt-only exchanges toward more comprehensive capital structure solutions. That is likely a healthy development for the market over the long run.
If you're curious why fewer than 15% of recent LMEs have involved high-yield bond-only structures, read the next article!
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Where Did the Risk Go?
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Our take:
One of the more interesting questions in today's market is why liability management exercises remain relatively rare in the high-yield bond market. Unlike syndicated loans, most bond indentures lack pro rata protections, making coercive exchanges relatively easier to execute. The answer may simply lie in credit quality. The quality of the high-yield market has continued to improve, offering a more defensive risk/reward profile as many of the weakest issuers have migrated to private credit and CCC exposure has fallen to near a 20-year low. With healthier credits, there is simply less need to kick the can down the road. For now, LMEs are likely to remain predominantly a leveraged loan—and increasingly a private credit—phenomenon.
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Practice Pointers
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More Del Monte and Serta Fall Out
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Our Take:
Serta and Del Monte will undoubtedly influence drafting, forum selection, and litigation strategy, but don't expect liability management transactions to go away -- they're here to stay.
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Game of Thrones
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Is AI inflationary or deflationary? (Part 1)
One of the most important economic questions of our time is whether AI is inflationary or deflationary. The answer matters to everyone from the Federal Reserve, whose mandate includes price stability, to bond investors, policymakers, businesses, and academics analyzing the long-term economic impact.
The reality is that both outcomes are likely true. AI is inflationary in the short run as the world races to build the infrastructure required, while becoming deflationary over time as productivity gains accelerate. However, focusing solely on whether AI raises or lowers prices may miss the larger point. The more important question is the broader economic transformation AI will create; a topic for another day.
The benefits to society of AI productivity resulting in deflation far outweighs the short run inflationary pressure from the AI buildout.
The massive investment required to build AI infrastructure is creating supply bottlenecks across data centers, electric and power generation, gas turbines, transformers, networking equipment, chips, memory, and specialized labor required to support this buildout. The strain is also reaching local power grids, increasing energy costs in markets where AI infrastructure is concentrated. Also, every project must clear its cost of capital, and higher financing rates are baked into required returns which then gets passed through to prices.
The all-in system cost per GPU has nearly doubled in a single generation, from roughly $55K per chip in NVIDIA’s GB300 racks to $108K in Vera Rubin. Micron’s HBM (memory) is an essential for component for AI workloads and faces severe supply constraints with costs rising sharply.
AI infrastructure inflation extends beyond semiconductors. Securing a Siemens or GE Vernova transformer for AI power has a 2-3 year backlog, with prices up approximately 75% in recent years.
Bottom line: One gigawatt has gone from a cost of $50B to build out to nearly $100B today.
These costs are beginning to reach consumers as AI-driven memory shortages contribute to expectations of higher next-generation iPhone prices, with the new iPhone 18 lineup expected to see a 20% price increase, upon launch.
With that said, digital infrastructure is an essential expedature to remain competitive in an AI-Driven world. Marathon Asset Management has a dedicated team focused on financing mission-critical digital AI infrastructure projects from GPUs to Data Centers to Power Assets as this represent a highly attractive opportunity.
The productivity benefits will come, and, for now, the inflation and growth ties to the AI buildout will continue as large U.S. Hyperscaler CapEx is expected to exceed $1.2T in 2027.
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To follow Bruce's thoughts on the markets, investing and more, follow
@bruce_markets
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Webinar Replay
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Powering the AI Boom
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Riding The Rollercoaster: European Covenant Trends in H1 2026
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July 28, 2026
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2026 Moody's Ratings US CLO & Leveraged Loan Conference
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September 17, 2026
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The Data Download
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Bringing Transparency to the Bankruptcy Process
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Our Take:
The Daily Cost of BK Legal fees Are Increasing.
Are we shocked? No.
We took a deep dive to see what is driving up the daily cost of restructurings and the culprit: Increasing Legal Hourly Rates. We analyzed final fee apps for top debtor law firms from 2018 to 2024 and found average hourly legal fees have increased by over 65% since 2018. Maybe a little bit of sunlight is the right disinfectant to help remedy the problem....
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