Draft Restructuring Support Agreement

Skill: Draft Restructuring Support Agreement

1. Subject-matter triage

• This task is a drafting exercise, not a summary: produce the operative restructuring support agreement first, then attach any drafting notes or unresolved-issue memorialization only as subordinate material.
• Treat the source package as a coordinated deal set. Read the term sheet, debt documents, forbearance, valuation, structure chart, employment terms, and negotiation notes together before drafting any provision.
• Identify whether the transaction is pre-arranged, pre-negotiated, or effectively locked before filing; that posture affects support obligations, milestone discipline, and disclosure framing.
• If multiple stakeholder groups, creditor tiers, or entity layers appear in the source set, map them before drafting so support covenants, releases, and consent mechanics align with the actual transaction architecture.

2. Failure modes the skill is correcting

• The draft omits core RSA mechanics: support obligations, milestones, termination rights, fiduciary-out language, or backstop/allocation mechanics where a commitment is shared.
• The draft silently resolves conflicts among source documents, leaving no bracketed drafting note to show which source controlled and why.
• The draft mixes economic concepts across documents without reconciling them, creating internal inconsistency in claim treatment, support obligations, or governance rights.
• The draft leaves open bankruptcy-specific risk allocations unaddressed, including estate challenge rights, adequacy of protections for consensual support, release scope, or financing-related conditioning.
• The draft fails to test timing language for weekends, business days, interdependent conditions, and milestone sequencing.
• The draft ignores tax, employment, or corporate approval implications that must be surfaced when they affect the support agreement’s operation.

3. Legal frameworks / domain conventions that apply

• Use standard RSA architecture: recitals, defined terms, support obligations, plan and disclosure mechanics, milestone schedule, termination events, fiduciary-out, assignment/transfer limits if relevant, injunction and specific-performance language if support is intended to be enforceable, governing law, venue, and customary exhibits.
• Board fiduciary-out: preserve the board’s ability to discharge fiduciary duties under applicable corporate law, typically framed against Delaware fiduciary-duty principles if the entity is a Delaware corporation or LLC governed by Delaware law; the clause should permit response to a superior proposal or changed circumstances consistent with those duties.
• Bankruptcy support mechanics: if the RSA contemplates releases, voting commitments, plan sponsorship, or lockup provisions, align them with Bankruptcy Code sections commonly implicated in chapter 11 plan support, including 11 U.S.C. §§ 1121, 1123, 1125, 1126, and 1129 as applicable.
• Financing or roll-up concepts: if prepetition debt is being refinanced, rolled, or primed, the draft should flag the need for court approval and lender-consent sensitivity under the Bankruptcy Code and the governing loan documents.
• Avoidance, preference, and challenge exposure: where the deal contemplates payments, exchanges, or support transfers to existing secured parties or insiders, preserve customary challenge rights, waiver carveouts, and estate-recovery issues consistent with Bankruptcy Code §§ 547, 548, 549, and 550 where relevant.
• Consent mechanics: if the draft binds parties to vote, support amendments, or accept release packages, match the consent threshold and required class or holder mechanics to the governing documents and bankruptcy voting rules.
• Tax and accounting conventions: if debt cancellation, exchange treatment, or basis consequences may arise, surface the issue and cross-reference a tax disclosure or tax matters section rather than assuming a single tax result.
• Corporate and employment conventions: if the source set includes employment terms, confirm whether retention, severance, change-in-control, or incentive provisions must be disclosed, approved, or conditioned in the RSA.
• Commercial drafting convention: use bracketed notes for open questions and for every conflict resolution so the client can see the source conflict, the chosen resolution, and the remaining decision point.

4. Analytical scaffolds

• Build the RSA clause-by-clause from the source set, not from memory. For each operative provision, ask: what source document supports it, what source document conflicts with it, and what is the cleanest harmonized drafting outcome?
• For each inconsistency resolved, include a bracketed drafting note that identifies the conflict in neutral terms and states the adopted resolution.
• For each open issue, include a bracketed drafting note that states what is missing, why it matters, and what client instruction is needed.
• Test every milestone, outside date, and deadline against the full timeline to ensure dependencies, cure periods, notice windows, and court-driven dates do not collide.
• Test every economic allocation, support obligation, or capped exposure against the source economics and the party structure so no clause quietly shifts risk across tiers or entities.
• If the source package supports more than one reading on a term, enumerate the competing readings before drafting and then select one with a note explaining the rationale.
• Where the RSA interacts with a plan term sheet or restructuring summary, keep the RSA consistent with the summary and make the exhibit control language explicit if an exhibit is intended to govern.
• If a provision has both a legal and a practical effect, draft for both: legal enforceability in bankruptcy and operational clarity for signing, voting, funding, or filing.

5. Vertical / structural / temporal relationships

• Track relationships vertically across entity levels, creditor classes, and support signatories so obligations run to the correct party and do not misallocate duties across affiliates.
• Track relationships horizontally across the debt documents, forbearance, valuation, structure chart, and employment terms so defined terms and conditions refer to the same commercial reality.
• Track relationships temporally across signing, effectiveness, support commencement, filing, disclosure approval, solicitation, confirmation, funding, and termination.
• If the agreement depends on future deliverables or court events, make the sequencing explicit and align each condition to the relevant milestone or outside date.
• If there is a rights offering, backstop, support commitment, or similar undertaking, specify who bears what exposure, when that exposure increases or ends, and what conditions cap or release it.

6. Output structure conventions

• Produce a single operative document titled as a restructuring support agreement.
• Use conventional agreement structure with articles or sections for parties, recitals, definitions, support commitments, plan mechanics, milestones, termination, fiduciary-out, remedies, releases or challenge rights if applicable, notices, governing law, and miscellaneous terms.
• Include any plan term sheet, summary economics, or implementation schedule as an exhibit only if it helps operationalize the agreement.
• Use bracketed drafting notes throughout for each resolved inconsistency and each open issue requiring client instruction.
• Keep drafting notes short, specific, and tied to the affected provision.
• Do not bury unresolved items in prose; surface them where the affected clause is drafted.
• Write the primary agreement content as the deliverable; any memorandum-like commentary remains secondary and should not displace the operative document.