Davis Polk partner and Liability Management & Special Opportunities practice head Brian Resnick discussed the potential impact of AI on liability management exercises (LMEs) with the American Lawyer.

Brian explained that an ebb in LMEs may be occurring in industries such as software as a service (SaaS), which is facing declining valuations due to the AI boom. A correction in SaaS could impact the ability for some companies to use LMEs. 

“Lenders have not had the leverage to shut down the documents to LME for new issuances. Only as part of an LME transaction do the documents tend to get locked down,” Brian said. “Maybe this changes if credit becomes less available as part of the ‘SaaSpocalypse,’ but we’ll have to see.”

“With LMEs Primed for Growth, Will Consolidation Among Clients and Firms Come With Risk?” American Lawyer (June 5, 2026) (subscription required) 

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