In most chapter 11 bankruptcies, existing lenders provide post-petition debtor-in-possession financing to allow the company enough liquidity to continue operations while it restructures (rather than be forced into liquidation). For the lender, this can help preserve collateral value and maximize recovery on the outstanding amount it's owed.

Sometimes, however, a borrower will threaten to ditch the existing lender to pursue a hostile filing and secure a priming debtor-in-possession loan from another party. This essentially hands an ultimatum to its current lender: cooperate with our restructuring proposal or we'll file without you and find a new lender willing to jump ahead of you in the capital structure.

But how often does this actually happen?

Proskauer's latest restructuring client update says that, despite how often the maneuver is discussed, the reality is that non-consensual priming DIPs remain extraordinarily rare. While such financing is permitted in a bankruptcy process, the practical hurdles make successful execution unlikely in most scenarios.

Under Section 364(d)(1) of the Bankruptcy Code, a debtor seeking a priming DIP must prove it meets two criteria: first, that it cannot obtain financing without the priming lien, and second, that existing lienholders' interests will be "adequately protected."

This second requirement is typically the biggest obstacle.

The concept of adequate protection isn't just a bankruptcy term, but rather is based on the constitutional protection of property interests granted by the Fifth Amendment and specifically extended to lenders in a rule that ensures secured creditors are not "deprived of the benefit of their bargain."

In other words, adequate protection is meant to protect a secured lender's right to collateral as it existed on the date of the bankruptcy filing.

It's a high bar to meet, and courts require concrete evidence.

In practice, debtors typically attempt to demonstrate adequate protection through an equity cushion—the amount by which collateral value exceeds the secured claim to be primed. Courts have generally held that a cushion of around 20 percent is sufficient.

The rule is straightforward, but it can be hard to make the math pencil out: if a lender has liens on substantially all assets and the company is distressed enough to be considering bankruptcy, a 20 percent equity cushion is not likely to actually exist.

If they can't make it work with the equity cushion argument, debtors occasionally test an alternative adequate protection theory: that existing lenders are adequately protected when a priming DIP is the only path to preserve going concern value. This argument suggests that without new financing, liquidation would destroy value, making the priming DIP beneficial even to the primed lenders.

If you think that sounds like a stretch, the courts would tend to agree with you—the going concern argument rarely works.

Beyond the legal hurdles, incumbent lenders already understand the business and its collateral, which accelerates timelines, and they have every incentive to provide DIP financing (the aforementioned collateral preservation and recovery maximization), which often means more competitive pricing than a new lender without such motivation.

With these hurdles, the challenge of successfully executing a priming DIP means threats are often more about negotiation leverage versus a serious attempt at the strategy. For borrowers and advisors, it’s a tool to bring existing lenders to the table.

• Clearlake Capital Group agreed to acquire Dun & Bradstreet (NYSE: DNB), a data analytics company, for $7.7 billion.

• Insight Partners is exploring a sale of PDI Technologies, an Alpharetta-based convenience store software provider that could fetch at least $4.5 billion, per Bloomberg.

• Blackstone is exploring a sale of ISN Software, a Dallas-based compliance software firm that could be valued at more than $6 billion, per Bloomberg.

• Nestle is exploring options for its water business, which could be valued at around €5 billion, with PAI Partners, Bain Capital, CD&R, and KKR among interested buyout firms, per Bloomberg.

• SER Group, a German content automation provider backed by Carlyle and TA Associates, acquired AFI Solutions, a German specialist in SAP document automation.

• Seven2 agreed to acquire a majority stake in HRK LUNIS, a German wealth management firm with over €6.6 billion in assets, from J.C. Flowers & Co.

• One Equity Partners agreed to acquire CraftMark Bakery, an Indianapolis-based wholesale producer of bakery products for quick-service restaurants and in-store retail.

• Bain Capital agreed to acquire a controlling stake in Namirial, an Italian digital transaction management software provider, from Ambienta for €1.1 billion.

• Elk Range Royalties, backed by NGP Energy Capital, agreed to acquire 250,000 net royalty acres in the Denver-Julesburg Basin from Occidental Petroleum (NYSE: OXY) for $905 million.

• JLL (NYSE: JLL) agreed to acquire Javelin Capital, a North American renewable energy investment banking firm.

• KarpReilly is exploring a sale of Stio, a Jackson Hole-based outdoor apparel brand, per PE Hub.

• Tele2 has hired Perella Weinberg Partners to advise on a possible sale of its wireless towers in Estonia, Latvia, and Lithuania, which could fetch around €500 million, per Bloomberg.

• Ardonagh Group, a London-based insurance broker majority-owned by Madison Dearborn Partners, is raising up to $2.5 billion in new funding for growth initiatives and acquisitions, per Bloomberg.

• Elliott Management has approached private equity firms to explore interest in acquiring Bayer's consumer health business, per the Financial Times.

• AT&T (NYSE: T) is in talks to acquire Lumen Technologies' (NYSE: LUMN) consumer fiber business at a potential valuation of more than $5.5 billion, per Bloomberg.

• CoreWeave raised $1.5 billion in its IPO priced at $40 per share, below its initial $47-$55 target range, giving the AI infrastructure provider a $23 billion valuation in the largest U.S. tech IPO since 2021.

• I Squared Capital is preparing to sell Irish power producer Energia Group, which could be valued at around €2 billion, per Bloomberg.

• Roper Technologies (Nasdaq: ROP) agreed to acquire CentralReach, a Ft. Lauderdale-based autism therapy software provider, from Insight Partners for $1.65 billion.

• Vitol is exploring the sale of VTX Energy Partners, a Permian basin shale producer that could be valued at more than $3 billion, per Reuters.

• Brigade Capital Management and Macellum Capital Management agreed to acquire Family Dollar from Dollar Tree (Nasdaq: DLTR) for around $1 billion.

• KKR and Japan Investment Partners agreed to acquire Topcon Corporation, a Japanese medical gear maker, for $2.31 billion.

• Silver Lake-backed fund led by Patrick Whitesell acquired a 10 percent stake in Omaha Productions, Peyton Manning's media company, at a $750 million valuation.

• PAI Partners acquired Nuzoa, a Madrid-based distributor of animal health products, from Abac Capital.

• AIM Equity Partners invested in AMOpportunities, a Chicago-based healthcare training platform for medical professionals.

• Stonepeak invested in Longview Infrastructure, a newly formed platform focused on electric transmission development and investment across the United States.

• VisiQuate, an Accel-KKR portfolio company focused on AI-powered revenue cycle management, acquired Rotera, a Denver-based healthcare automation software provider.

• Pryor Learning, a portfolio company of Trive Capital and Epic Partners, acquired PeopleKeys, an Ohio-based provider of behavioral assessments and related services for hiring and organizational development.

• ProSite Services, a portfolio company of RF Investment Partners, acquired Potter's Potties, a Northern Virginia portable sanitation provider.

• Angeion Group merged with Case Works, both litigation-focused portfolio companies of Renovus Capital Partners.

• Ridgeline Roofing & Restoration, a portfolio company of Bertram Capital, acquired Brody Allen Exteriors, a St. Louis-based roofing contractor.

• McGraw Hill, a portfolio company of Platinum Equity, acquired Essaypop, a cloud-based writing solution for K-12 education.

• Nonantum Capital Partners acquired MSI Express, a Portage, Indiana-based food and beverage contract manufacturer and packaging firm, from HCI Equity Partners.

• Heartland Growth Partners acquired a majority stake in Victory Machine & Fabrication, a Sidney, Ohio-based provider of millwright, machining, and metal fabrication services.

• Descartes Systems Group (Nasdaq: DSGX) acquired 3GTMS, a Columbus, Ohio-based provider of transportation management solutions, from Sumeru Equity Partners and other investors.

• Yotta, a Waltham-based digital experience optimization company backed by PSG and General Catalyst, acquired SpeedSense, a Canadian web performance consultancy.

• Vandemoortele, a Belgian foods group, agreed to acquire Bunge's (NYSE: BG) European Margarines & Spreads business, which includes multiple manufacturing sites and consumer brands across Europe.

• TPG agreed to acquire a 90 percent stake in Siemens Energy's wind turbine business in India and Sri Lanka.

• Ardian agreed to acquire French renewable energy producer Akuo from Intermediate Capital Group for nearly €950 million.

• Abu Dhabi Investment Authority agreed to acquire European Camping Group, an outdoor accommodation operator, from PAI Partners, which will retain a minority stake.

• Bobo's, a Colorado-based oat bar manufacturer, has hired William Blair to run a sale process, per Axios Pro.

• Searchlight Capital Partners is exploring a sale of Survitec's aerospace and defense business and has hired Houlihan Lokey to gauge buyer interest, per Bloomberg.

• Apollo Global Management is exploring the sale of its majority stake in Cox Media Group, a portfolio of TV and radio stations that could fetch around $4 billion, per Bloomberg.

• Silver Lake and Davidson Kempner are competing to acquire Vacasa (Nasdaq: VCSA), a vacation rental marketplace trading at a market value of around $120 million.

• Coral Tree Partners acquired a minority stake in Innovative Artists, a talent and literary agency.

• Signal Hill Equity Partners acquired a majority stake in CSArch, an Albany, NY-based architecture and engineering firm specializing in educational facilities.

• Tailwind Capital invested in Cloud for Good, an Asheville-based Salesforce consultant focused on nonprofit and higher education sectors.

• Audax Strategic Capital invested in TCP Analytical, a South Carolina-based manufacturer of specialty chemicals for life sciences, alongside expanded commitment from existing sponsor Riverarch Equity Partners.

• Earth Systems, a portfolio company of Palm Beach Capital, acquired Spangler Environmental, an environmental and risk management consultant serving the Carolinas and Florida.

• Unified Health Services, a Nashville-based portfolio company of Reynolda Equity Partners, acquired Sunbelt Medical Financial, a Florida-based healthcare claims management firm.

• Interstate Waste Services, a portfolio company of Littlejohn & Co. and Ares Management, acquired Pinto, a New Jersey waste hauling company.

• ResultsCX, a Norristown, PA-based portfolio company of ChrysCapital, acquired Aucera, a Mahwah, NJ-based customer experience management company.

Tech, Vertical SaaS, & Misc. Enterprise

• n8n, a Berlin-based workflow automation platform for technical teams, raised €55 million in Series B funding led by Highland Europe, with participation from HV Capital, Sequoia Capital, Felicis, and Harpoon.

• Yutori, a San Francisco-based developer of AI assistants for automating digital tasks, raised $15 million in seed funding led by Radical Ventures, with participation from Felicis.

• DeepIP, an AI platform that helps attorneys draft patent applications, raised $15 million in Series A funding led by Resonance, with participation from Headline, Serena Capital, and Balderton Capital.

• Brisk Teaching, an AI education platform for K-12 schools, raised $15 million in Series A funding led by Bessemer Venture Partners, with participation from Owl Ventures, South Park Commons, and Springbank Collective.

• Paid, a business platform for AI agents, raised €10 million in pre-seed funding co-led by EQT Ventures and Sequoia Capital, with participation from GTMFund.

• WunderGraph, an open-source platform for GraphQL API management, raised $7.5 million in Series A funding led by Karma Ventures, with participation from eBay Ventures and Aspenwood Ventures.

• Chord Commerce, a customer data platform for e-commerce brands, raised $5.5 million in seed funding led by M13, with participation from Act One Ventures and GRO Capital.

• ai|coustics, a Berlin-based audio enhancement startup, raised €5 million in seed funding led by Partech, with participation from Acurio, Intuition, Arc Investors, Connect, and FOV Ventures.

• Nace.AI, a developer of task-specific AI models for enterprises, raised $5 million in funding led by General Catalyst.

• AmberSearch, a German AI platform for internal company document search, raised €2.1 million in seed funding led by Ventech.

• Experial, a German startup creating AI digital twins for market research, raised €2 million in pre-seed funding led by Capnamic Ventures, with participation from xdeck Ventures.

Fintech

• Chronicle, an oracle and data infrastructure provider for Ethereum tokenized assets, raised $12 million in seed funding led by Strobe Ventures, with participation from Galaxy Vision Hill, Brevan Howard Digital, Tioga Capital, 6th Man Ventures, Fenbushi Capital, Robot Ventures, Gnosis Ventures, and Credibly Neutral.

• Sympera AI, an AI platform that helps banks analyze data and prioritize clients for relationship managers, raised $10 million in seed funding co-led by Nyca Partners and Viola Ventures.

• Burbank, a Welsh fintech enabling tap-and-PIN payments for online transactions, raised £5 million in seed funding led by Mouro Capital, with participation from Anthemis, Portfolio Ventures, and Foxe Capital.

Consumer & Media

• Arcade, an AI platform for customizing physical products, raised $25 million in Series A funding co-led by Canaan Partners and Forerunner Ventures, with participation from Adverb Ventures, Factorial Funds, Offline Ventures, Sound Ventures, Inspired Capital, and Torch Capital.

• Playback, a sports livestreaming platform where fans can watch games together, raised $22 million in Seed and Series A funding led by Seven Seven Six, with participation from Khosla Ventures and NBA Investments.

• Pro Padel League, a North America-based professional padel league, raised $10 million in seed funding led by Left Lane Capital, with participation from Kactus Capital and Epic Padel.

• Rival, a London-based platform that converts 2D videos into 3D experiences, raised $4.2 million in pre-seed funding led by Speedinvest, with participation from New Renaissance Ventures.

• Hook, a platform for legal song remixing that compensates artists, raised $3 million in additional funding from Khosla Ventures, Kygo's Palm Tree Crew, The Raine Group, Imaginary Ventures, Point72 Ventures, and Waverley Capital.

Healthcare

• Solace, a healthcare company connecting patients with healthcare advocates, raised $40 million in Series B funding led by Menlo Ventures at a valuation above $300 million.

• Silna Health, an AI-powered platform for healthcare administrative authorizations and verifications, raised $27 million in total funding, including a $22 million Series A round co-led by Accel and Bain Capital Ventures, following a previously unannounced $5 million seed round also led by the same investors.

• Taxo, a healthcare data automation platform for administrative workflows, raised $5 million in seed funding co-led by Y Combinator, General Catalyst, and Character.

Industrials, Greentech, & Other

• Marvel Fusion, a Munich-based nuclear fusion energy company using laser technology, raised €50 million in Series B extension funding from EQT Ventures, Siemens Energy Ventures, and the European Innovation Council Fund, with participation from Tengelmann Ventures and Bayern Kapital.

• CamGraPhIC, a developer of graphene-based optical interconnect technology, raised €25 million in Series A funding co-led by CDP Venture Capital, NATO Innovation Fund, Sony Innovation Fund, and Join Capital, with participation from Bosch Ventures, Frontier IP Group, and Indaco Venture Partners.

• Contoro Robotics, an Austin-based developer of trailer and container unloading robots, raised $12 million in Series A funding from Doosan, Coupang, Amazon Industrial Innovation Fund, IMM, SV Investment, KB Investment, Kakao Ventures, and Future Play.

• EQT raised €21.5 billion for its sixth infrastructure fund, exceeding its €20 billion target and marking a 35 percent increase from its predecessor fund.

• K1 Investment Management is targeting $6.25 billion for its sixth fund focused on midmarket enterprise software companies.

• Oakley Capital raised €4.5 billion for its sixth flagship private equity fund.

• Advent International is finalizing a single-asset continuation vehicle for Xplor Technologies with AlpInvest and Coller Capital as lead investors, valuing the London-based payments company at $3 billion to $4 billion, per Bloomberg.

• Madison Dearborn Partners is targeting $3 billion for its ninth flagship buyout fund, its smallest since 1999, per Bloomberg.

• BC Partners Credit is targeting $1.4 billion for its third Special Opportunities Fund, per Bloomberg.

• Falfurrias Management Partners raised $1.35 billion for its sixth middle market fund.

• Emergence Capital raised $1 billion for its seventh fund, per Fortune.

• Qiming Venture Partners is targeting $800 million for its ninth fund with a $1 billion hard cap, per Bloomberg.

• Churchill Asset Management raised $750 million for its third collateralized fund obligation.

• Pike Street Capital raised $199 million for a single-asset continuation fund to back Impel Company, a provider of fluid management systems focused on water and wastewater treatment sectors.

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