Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, January 28, 2008

Sallie Mae Settles Suit for New Financing

Sallie Mae settled its lawsuit against the former buyers who backed out of the $25 billion buyout and claimed that new legislation cutting federal subsidies to student lenders was a material adverse change that allowed them to walk away without paying the $900 million termination fee.  The defendants, who include the J.C. Flowers private equity firm and banks JPMorganChase and Bank of America, will refinance about $30 billion in debt that is falling due soon, an arrangement that will ease Sallie Mae's credit troubles.  NYTimes, Sallie Mae Settles Suit Over Buyout That Fizzled

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