Bank of New York Mellon v. Realogy Corp.

OPINION

LAMB, Vice Chancellor.

All of a corporation’s unsecured indebtedness is trading at a deep discount to face value. The corporate borrower proposes to take advantage of the substantial arbitrage opportunity presented by offering to refinance a large amount of the unsecured indebtedness with a substantially smaller amount of a senior secured term loan. The corporation means to do this by offering holders of the unsecured indebtedness the opportunity to exchange notes for a participation in a new term loan facility secured by a second lien on its assets. If successful, this gambit will…