The golden age of liability management transactions — the decade-long run of aggressive structural engineering and contractual gamesmanship — is drawing to a close as of the second half of 2025. For much of the 2010s and early 2020s, the outcome of a credit negotiation depended less on pricing than on structure. Borrowers with inventive legal advisors and a high tolerance for reputational risk could exploit definitional ambiguity, reclassify assets and subordinate existing lenders, often entirely within the four corners of the contract. Consider J.Crew’s 2016 masterstroke: The retailer transferred its valuable trademark to an unrestricted subsidiary. In other words, they moved the company’s most valuable asset — the ability to call something “J.Crew” — outside the original credit group and beyond the reach of existing lenders. That intellectual property was then used as collateral for new financing that leapfrogged existing creditors in the capital structure. The maneuver allowed J.Crew to raise fresh capital while leaving original lenders holding significantly devalued claims. J.Crew didn’t invent this sort of financial engineering; PetSmart had a similarly tricky 2013 maneuver, involving selling a nominal sliver of equity in Chewy (just enough to classify it as a “non-wholly owned” subsidiary) and subsequently shifting its most valuable assets out of the credit facility’s reach. With a 1% sale, PetSmart effectively stripped 100% of Chewy’s value from creditor protection. It was an elegant exploitation of definitional loopholes. What made such tactics viable in the first place was their asymmetry and novelty. No law firm, lender or sponsor had a complete view of how these structures functioned across the broader market.