Latest Articles
90 Second Lesson: Deciphering California Receiverships
Understanding California Receiverships Through California CCP 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: Jeffrey[...]
6 Common Mistakes in Drafting Collateral Descriptions
Avoid These Costly Errors in Collateral Descriptions Drafting can easily go awry. When collateral descriptions are drafted errantly in security agreements and financing statements, secured creditors may not get what they bargained for, and expensive disputes can bloom. A[...]
Convertible Securities: Appealing in this Uncertain Market
The market has changed a lot since our last look at convertible bonds about six months ago. Not only has the stock market been shaken by the potential fall-out from the Covid-19 stay-at-home orders, but also interest rates have fallen[...]
Bank Stocks on Sale
With the sharp slowdown in the economy, bank stocks have declined significantly, and, unlike the broad S&P 500 Index, have not recovered much of their lost value. Year-to-date, our universe of 180 bank stocks has declined 31%, compared to the[...]
90 Second Lesson: What is the Difference Between Recharacterization and Equitable Subordination?
Discerning Similar Methods to Lower the Order of Priority of Creditors’ Claims [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[...]
Best Practices for UCC-3 Terminations and Continuations
Careless UCC-3 Termination Filings Have Costly Consequences Lenders and borrowers are focused on potential workouts and refinancing of loans due to the COVID-19 pandemic. As such, UCC-3 terminations and continuations will be thrust into the spotlight. Under Article 9[...]
Kuney’s Corner – Giving Secured Creditor Substitute Collateral in a Chapter 11 Cramdown
Pacifying a Hostile Lender with a Motion to Substitute Collateral Can a Chapter 11 debtor confirm a plan that gives a hostile secured creditor a lien on an orange as a substitute, in essence, for the secured creditor’s lien[...]
PPP Loans for Chapter 11 Debtors? Maybe…But You Have Other Options
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[...]
Corporate Attorney-Client Privilege is in the Hands of the Bankruptcy Trustee
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[...]
90 Second Lesson: Receivership vs Bankruptcy
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.][...]
Can You Challenge a Section 363 Sale? Bid Now or Forever Hold Your Peace
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[...]
Finding Truth in a Debtor’s Balance Sheet: Analyzing Assets, Liabilities and Equity
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[...]
Meridian Sunrise Village: Risks of Loan-to-Own Strategy
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[...]
Bankruptcy Gifts: When a Court Will Look a Gift Horse in the Mouth
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[...]
90 Second Lesson: I’ve Been Asked to Sign an Involuntary Bankruptcy Petition. Should I?
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[...]
Introduction to Distressed Debt Analysis: 4 Company Valuation Methods for Investors
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[...]
The Elegant Swan and Clumsy Duck: What is Recharacterization in Bankruptcy?
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[...]
The Fisker Case: My Credit Bid Capped at the Amount I Paid for the Debt?
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[...]
Bankruptcy Considerations in a Collections Action
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?[...]