Identify Issues In Restructuring Support Agreement

---
name: identify-issues-in-restructuring-support-agreement
task_id: bankruptcy-restructuring/identify-issues-in-restructuring-support-agreement
description: Ensures an RSA issues memo for a subordinated secured creditor identifies and compares class-by-class recoveries, analyzes priority and allocation issues, evaluates plan support mechanics and dilution effects, assesses any termination-fee or similar incentive structure, and considers the implications of intercreditor and standstill terms.
activates_for: [planner, solver, checker]
---

# Skill: Identify Issues in a Restructuring Support Agreement

## 1. Subject-matter triage
- Treat this as a restructuring issue-spotting memo for an excluded or subordinated secured creditor, not a deal summary.
- Start by identifying the stakeholder set, the operative economics, and the documents that govern treatment, voting, releases, financing, and enforcement.
- If multiple creditor groups, classes, support parties, or transaction steps exist, enumerate them before analyzing effects.
- If only one group or one scenario is actually in scope, say so and explain why.

## 2. Failure modes the skill is correcting
- The memo narrates the RSA provisions but never compares recoveries or allocations across constituencies.
- The memo misses priority inversions, hidden transfers, or dilution caused by new value issuance, fee structures, or support mechanics.
- The memo treats consent thresholds, joinder mechanics, or vote commitments as boilerplate rather than as leverage-shifting provisions.
- The memo ignores how intercreditor or standstill restrictions constrain enforcement, financing, or tactical options.
- The memo states conclusions without tying them to the governing bankruptcy, contract, or lien-priority rule.
- The memo flags an issue but does not quantify it, cross-reference the interacting provision, or state the client consequence.
- The memo lists problems without ranking severity or ending with concrete next steps.

## 3. Legal frameworks / domain conventions that apply
- **Priority and allocation in Chapter 11:** Analyze treatment under the Bankruptcy Code’s distribution framework, including absolute-priority principles and plan classification/treatment concepts under 11 U.S.C. §§ 1122, 1123, 1129, and, where applicable, § 510(a) and related subordination doctrines.
- **Lien and claim hierarchy:** Compare contractual lien priority, secured claim treatment, carve-outs, roll-up mechanics, and any debtor-side or new-money priming features that may alter recoveries.
- **Intercreditor enforcement limits:** Apply the governing intercreditor agreement, subordination provisions, enforcement standstills, and turnover / payment-direction mechanics to determine what actions the excluded lender may or may not take.
- **Support agreement mechanics:** Evaluate voting commitments, fiduciary-out concepts if present, milestone covenants, execution conditions, drop-dead dates, and termination triggers as bargaining constraints.
- **Release and waiver architecture:** Review third-party releases, exculpation, injunctions, and waiver language for how they affect litigation and settlement leverage.
- **Equity and dilution economics:** If the RSA contemplates equity issuance, warrants, management incentives, or backstop economics, assess dilution and who bears it.
- **Fee and premium structures:** Assess expense reimbursements, consent fees, termination fees, roll-up economics, and similar incentives for their effect on behavior and priority.
- **Special asset or attribute value:** If value depends on tax attributes, litigation claims, licenses, permits, or other intangible assets, determine whether the documents allocate that value or leave it unpriced.

## 4. Analytical scaffolds
- Identify each relevant party, class, tranche, or support signatory, then compare its treatment across the RSA, term sheet, plan framework, and intercreditor documents.
- For each issue, state the governing rule or document provision, then test whether the proposed economics or process departs from the expected hierarchy.
- Quantify the issue using source-document figures where available: claim size, distribution rate, fee amount, dilution percentage, maturity, milestone timing, or enforcement window.
- Cross-reference the issue to every other clause or document that changes its meaning, including schedules, joinders, term sheets, disclosure materials, and intercreditor terms.
- State the downstream consequence for the client: reduced recovery, lost enforcement rights, impaired negotiation leverage, voting lock-in, litigation exposure, or confirmation risk.
- Distinguish between purely economic issues and process issues; note when a procedural defect creates leverage even if the economics are uncertain.
- Where the source materials do not supply enough numbers, say what is missing and avoid inventing arithmetic.
- Close each issue with: description, legal basis, economic impact, severity, and recommended action.
- End with a strategic assessment of the creditor group’s leverage, likely pressure points, and best path for preserving optionality.

## 5. Vertical / structural / temporal relationships
- Track the timeline from signing through milestones, outside dates, court approval steps, solicitation, confirmation, and emergence.
- Compare rights before signing, during the support period, after a default or termination event, and at confirmation.
- Flag any step-up or step-down in treatment triggered by consent status, accretion of fees, execution timing, or default under a milestone.
- If the RSA allocates rights vertically among first lien, second lien, unsecured, equity, or insider constituencies, describe the direction of value flow and who sits above or below the client at each stage.
- If the documents make rights conditional on future events, isolate the trigger and the consequence so the client’s posture can be assessed at each point in time.

## 6. Output structure conventions
- Write a numbered issue memo with a stated ordinal severity scale defined once at the top and applied uniformly to every issue.
- For each issue, use a compact sub-structure: Description → Legal Basis → Economic Impact → Severity → Recommended Action.
- Every issue must include a quantified or scaled reference from the source documents, a cross-reference to interacting provisions or documents, and the downstream consequence for the client.
- Cite the controlling authority for each legal proposition by name and section or by the relevant agreement provision when the point turns on contract text.
- Include a short opening summary that frames the creditor’s overall position and main leverage points.
- End with a distinct Recommended Actions block that gives imperative next steps, assigns the responsible role, and ties timing to the relevant milestone or deadline in the documents.
- Keep the memo concise but complete; do not reproduce the full RSA or stray into document-by-document narration.