NEW YORK–(BUSINESS WIRE)–LSTA, the trade association for the U.S. corporate lending market, today was joined by SIFMA, the MFA, the Investment Company Institute and the Creditor Rights Coalition, in submitting an amicus brief in support of the defendant lenders in a misguided antitrust case filed by Optimum Communications, Inc.
The complaint, one of the first of its kind, is an attempt to apply traditional antitrust principles to “Cooperation Agreements”, which have grown increasingly common in the leveraged finance industry. In November 2025, Optimum sued co-op lenders and other creditors challenging their cooperation agreement as an illegal cartel.
LSTA and its partners argue that decades of settled law belie plaintiff’s novel theory that Cooperation Agreements among lenders violate the Sherman Antitrust Act. Instead, creditors to the same syndicated loan have always endeavored to ensure that similarly situated lenders who collectively extended the loan on equal footing with one another remain on equal footing when the borrower experiences distress.
As the amicus brief notes, Cooperation Agreements “are not a sword, but a shield.” Without Cooperation Agreements, distressed borrowers can coerce creditors into giving additional financial support or risk losing value by forcing creditors to choose between two problematic options: joining the borrower’s short-sighted plan by providing more funding and thereby preserving at least some of the value if the borrower fails to overcome its financial distress, declining to provide additional funds but risk getting nothing and losing previously bargained-for rights.
Cooperation Agreements are thus an insurance policy with positive ripple effects across financial markets, ensuring that equal creditors will be treated equally. This increases creditors’ willingness to participate in the markets for corporate debt, improving access to capital, lowering interest rates, and facilitating efficient restructurings, to the benefit of market participants, including borrowers as well as Amici and their members.
The brief adds that U.S. antitrust laws have no quarrel with any of this: cooperation among creditors “in an effort to collect as much as possible of the amounts due under competitively determined contracts” is simply “not the sort of activity with which the antitrust laws are concerned.” And, as the Second Circuit has recognized, “[j]oint activity by creditors facing a debtor is commonly in the interests of all parties” because it “maximizes repayment and gives the debtor a chance of survival.”
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