Davis Polk advised an ad hoc group of prepetition secured second-lien term lenders in connection with the chapter 11 bankruptcy cases of Aretec Group, Inc. (formerly known as RCS Capital Corporation (together with its affiliates that were debtors in the proceedings referenced below, the “RCS Debtors”)) and Cetera Financial Holdings, Inc. (together with its affiliates that are debtors in the proceedings referenced below, the “Cetera Debtors” and together with the RCS Debtors, the “Debtors”), each filed in the District of Delaware on January 31, 2016. Before filing, the first- and second-lien lenders agreed to a Restructuring Support Agreement under which approximately 92.5% of the RCS Debtors’ lenders agreed to support a plan of reorganization that would, inter alia, equitize a significant portion of the RCS Debtors’ prepetition financial debt and distribute 95% of the equity in Aretec Group, Inc. to lenders. Additionally, the lenders agreed to provide a $100 million delayed-draw term debtor-in-possession facility that would roll into a $150 million exit facility. On May 19, 2016, the bankruptcy court entered an order confirming the Debtors’ respective reorganization plans, including the exit facility. The restructuring was designed in particular to allow the Debtors’ fifteen registered broker dealer subsidiaries to continue to conduct business without interruption outside of bankruptcy proceedings while the parent and certain other affiliates restructured their debt and to assure regulators and clearing houses that the Debtors remained adequately capitalized and fully operational.

Aretec Group, Inc. is the holding company of Cetera Financial Group, Inc., a retail investment advice platform and network of independent financial advisors. Cetera Financial Holdings, Inc., a subsidiary of Aretec Group, Inc., is a financial services holding company formed in 2010 which provides independent broker-dealer services and investment advisory services.

The Davis Polk insolvency and restructuring team included partner Timothy Graulich and associates Natasha Tsiouris, David Schiff and Dylan A. Consla. The credit team included partner Meyer C. Dworkin and associates Scott M. Herrig and A. McLean Crichton. Partner Brian Wolfe and associate Evan Rosen provided corporate governance advice. Counsel Erika D. White provided regulatory advice. All members of the Davis Polk team are based in the New York office.