Davis Polk advised JPMorgan Chase Bank, N.A. as administrative agent on a $1.855 billion senior secured credit facility for Credit-Based Asset Servicing and Securitization LLC (C-BASS) and certain of its affiliates, in connection with the out-of-court restructuring and in-court Chapter 11 proceedings for C-BASS. On April 25, 2011, C-BASS confirmed a liquidating Chapter 11 plan, consensually negotiated among C-BASS, its unsecured creditors' committee and J.P. Morgan. Prior to C-BASS's Chapter 11 filing, J.P. Morgan conducted a public auction of nearly 70 mortgage-backed securities that comprised the majority of the remaining collateral under the credit facility. During the auction, J.P. Morgan, on behalf of the senior lenders, submitted credit bids for the mortgage-backed securities, and the securities ultimately purchased were contributed to a limited liability company for the benefit of the senior lenders.

C-BASS was a leading issuer, servicer and investor specializing in credit-sensitive residential mortgage assets, including performing subprime and “Alt A,” non-performing, re-performing and second-lien residential mortgage loans and small commercial mortgage loans, and subordinated and mezzanine residential mortgage-backed securities with prime, subprime, Alt A and high loan-to value collateral. C-BASS generally either held purchased assets in its portfolio or securitized them and retained the most subordinate or “first-loss” tranches of issued securities as well as servicing rights for the securitized assets. C-BASS and certain of its affiliates underwent an extensive out-of-court restructuring in November 2007 and filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code on November 12, 2010.

The Davis Polk insolvency and restructuring team included partners Donald S. Bernstein and Damian S. Schaible, and associates Lynn Poss, Darren S. Klein, Eric L. Ruiz and Christina Henderson. The finance team included partner Jinsoo H. Kim and associates Meyer C. Dworkin, Angela Doolan and Tenley Laserson Chepiga. The M&A team included partner Michael Davis and associates Brian Wolfe and Tyler B. Carson. Partner Kathleen L. Ferrell and associates Craig A. Phillips and Sarah Joy (London office) provided tax advice. Elliot C. Law and Karen S. Cottrell were the legal assistants on the deal. All members of the Davis Polk team are based in the New York office unless otherwise noted.