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March 30, 2026
Cadwalader partner Shai Schmidt was featured in Octus’ Americas Special Sits and Distressed Weekly in the article, “Cadwalader’s Schmidt Eyeing Ripple Effects of AI in Private Credit Arena, Lays Out Firm’s Vision for Next Stage of Its Restructuring Practice.” The piece examines how AI-driven disruption in software companies is creating distress in the private credit market, lowering publicly traded BDC share prices and triggering significant redemption requests from large private BDCs.
Shai, who joined Cadwalader earlier this month, noted that some cooperation agreements are nominally open but that the issue for some lenders is that “the steering committee is allowed to negotiate a favorable deal for its members without any guardrails governing the treatment of non-steerco co-op members.” Unfettered definitions of carve-out premiums are, "one way to accomplish that," he explains, "though we've also seen coops that explicitly allow different tiers of treatment under an LME.”
He also outlined the strategy behind the firm’s Financial Restructuring Practice, led by co-heads Doug Mintz and Bevis Metcalfe, which aligns the practice with creditor-side representations for four key secured creditor groups: banks, CLOs, private credit funds and multi-strategy investors. Shai said his primary focus will be on CLO clients, drawing on relationships he developed representing CLOs in several large and complicated LMEs. He expects the practice to expand significantly by combining his CLO expertise with the firm’s global reputation and connectivity, advocating for lenders in both distressed in-court and out-of-court situations.
Read the full article here.
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