Most Recent Articles About Restructuring, Insolvency & Vulture Investing:

PPP Loans for Chapter 11 Debtors? Maybe…But You Have Other OptionsBy Mark Melickian • 06/01/2020
The SBA’s Views, Court Rulings and Options for Your Company You need to restructure your debt and/or deal as soon as possible with assertive creditors. You want to preserve your company, and you would benefit (or already have benefited) from Paycheck Protection Program (PPP) funds as a bridge. What do[...]
Corporate Attorney-Client Privilege is in the Hands of the Bankruptcy TrusteeBy Dave Madden • 05/28/2020
When is Your Company’s Attorney-Client Communication No Longer a Secret?   Imagine if every secret and strategy that you had ever shared with your attorney were laid open for the world to see. A trustee in a business bankruptcy case may well have the power to review, publish, and wield[...]
90 Second Lesson: Receivership vs BankruptcyBy The DailyDAC Editors • 05/22/2020
The Benefits and Downsides of the Receivership Process   [Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] QUESTION: Do secured creditors benefit more from a debtor’s bankruptcy[...]
Can You Challenge a Section 363 Sale? Bid Now or Forever Hold Your PeaceBy Jonathan T. Brand • 05/21/2020
How Natural Chem Holdings Tried to Beat the Wind in a 363 Sale Appeal    You would like to buy wind turbines in a lease-to-own scenario—that is, you would like to take possession of certain items and pay over time or in a lump-sum at some point in the future.[...]
Finding Truth in a Debtor’s Balance Sheet: Analyzing Assets, Liabilities and EquityBy David Gottlieb • 05/14/2020
How to Read a Balance Sheet Beyond Surface Level   A balance sheet provides a snapshot of a company’s financial condition as of a specific date by presenting three components: assets, liabilities and equity.  While a balance sheet may help its user to evaluate a company for stability, investment potential,[...]
Meridian Sunrise Village: Risks of Loan-to-Own StrategyBy Christopher M. Cahill • 05/06/2020
Considerations for Distressed Private Equity   You are a PE fund manager. Your fund employs a loan-to-own strategy (also referred to as distressed private equity) to effect take-overs of target companies. You are accustomed to exerting powerful leverage in chapter 11 cases, particularly when you buy enough claims to confirm[...]
Bankruptcy Gifts: When a Court Will Look a Gift Horse in the MouthBy Theresa A. Driscoll • 05/01/2020
Is the Jury In or Out on Chapter 11 Bankruptcy Gifts?   The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor's proposed exit—either through a chapter 11 plan or a Section 363 sale. Bankruptcy "gifts" typically involve a structurally senior[...]
90 Second Lesson: I’ve Been Asked to Sign an Involuntary Bankruptcy Petition. Should I?By The DailyDAC Editors • 04/30/2020
The Advantages and Disadvantages of an Involuntary Petition   QUESTION: The credit manager of an Akron-based company asks: “One of our commercial accounts is pretty far behind in paying on our invoices. Another vendor approached me and asked me to join in signing an involuntary bankruptcy petition. Is there any[...]
Introduction to Distressed Debt Analysis: 4 Company Valuation Methods for InvestorsBy Jon Peterson • 04/24/2020
How You Can Use Your Personal Experience and Expertise to Formulate and Investment Thesis   It’s time to take an in-depth look at distressed debt investing and how you can use your personal experience in conjunction with company valuation methods to make decisions. Most investors will want to enter the[...]
The Elegant Swan and Clumsy Duck: What is Recharacterization in Bankruptcy?By James T. Bentley • 04/22/2020
How the Recharacterization of Debt Impacts Creditors   The line between a loan and an equity investment isn’t always clear. In these cases, those who represent unsecured creditors can impact the distribution on claims in the creditor’s favor. This is done through the recharacterization of debt. In bankruptcy, a debt[...]
The Fisker Case: My Credit Bid Capped at the Amount I Paid for the Debt?By Jonathan T. Brand • 04/16/2020
Should Secured Creditors and Buyers of Distressed Assets Worry About Facing Limits On Their Credit Bids?    One way to purchase assets (including the assets of a business as a going concern) is to prevail at a foreclosure sale or a § 363 bankruptcy auction with a credit bid. The[...]
Bankruptcy Considerations in a Collections ActionBy Allyson V. Cofran • 04/10/2020
A Summary of Consumer Bankruptcy for Collecting Creditors Understanding what can occur during a collection action can be vital in determining which accounts to pursue. One common occurrence is that the debtor files for bankruptcy. So, what exactly is bankruptcy? Bankruptcy is a procedure that allows debtors to reorganize their[...]
90 Second Lesson: What Is a Composition Agreement?By The DailyDAC Editors • 04/07/2020
How a Composition Agreement Can Be an Alternative to Chapter 11   QUESTION: John B asks: What is a composition agreement? ANSWER: A composition agreement is an out-of-court contract between a debtor and multiple creditors providing for the reduction or delay in payment of amounts owed by the debtor to[...]
The Good, the Bad, and the Ugly of Replacing a Debtor’s Management with a Chapter 11 TrusteeBy Lawrence V. Gelber • 04/01/2020
Which is Better: Debtor in Possession or Chapter 11 Trustee? The mere act of filing a chapter 11 bankruptcy petition significantly alters the relationship between a debtor and its creditors, yet, perhaps surprisingly, the filing does not automatically trigger removal of the very management team that led (or maybe drove)[...]
Getting Over the Scariness of Filing an Involuntary Bankruptcy PetitionBy William Barrett • 03/30/2020
The Notorious Case of the Involuntary Bankruptcy Mention involuntary bankruptcy to many in the credit industry and you often get a sharp response: no way. Decisions that awarded punitive damages to debtors have received broad attention. Trying to collect on a bad loan is tough enough. Why compound the struggle[...]

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