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Chapter 11 Plans
The Good, the Bad, and the Ugly of Replacing a Debtor’s Management with a Chapter 11 Trustee
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) the debtor into bankruptcy […]
Sears Chapter 11 Rulings Threaten to Upend Administrative Claim Status for Goods Vendors
Application of Section 503(b)(1)(A) and 503(b)(9) in the Sears Chapter 11 Filing Precedent setting rulings in the Sears chapter 11 case could radically alter how vendors support companies who file for bankruptcy in the future. Historically the presumption and practice in the vast majority of bankruptcy cases has been that vendors receive priority status […]
Dealing with Corporate Distress 03: Welcome to the Jungle: The Animals of the Corporate Restructuring Industry
The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency Who are you? Maybe your company needs to file chapter 11. Or one of your customers recently filed. Or maybe a competitor is in (or is rumored to be close to filing) chapter 11. Maybe you’re thinking about getting into the corporate restructuring industry yourself. Regardless […]
Dealing with Corporate Distress 02: These Are the People in Our Neighborhood: An Overview of Parties in Chapter 11
A Series on the ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency Since a judge presides over a chapter 11 proceeding, one might assume that a chapter 11 case is like any other commercial litigation matter, with one party on each side of the case: a plaintiff and a defendant. One would be wrong (Felix […]
Dealing with Corporate Distress 01: Hello Darkness, Our Dear Friend
A Series on the ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency Greetings, dear reader: It seems you’re interested in learning how to deal with corporate distress, and we’re glad you’re here. But let’s first make sure you got on the right plane. Maybe you . . . Are a C-suite executive of a business […]
Mega RV: Unsecured Creditors Fall Short in Bankruptcy Settlement
An Unfortunate Case for Unsecured Creditors A settlement agreement in the Mega RV Corp. bankruptcy highlighted the interplay between an overzealous lender and a repentant business owner who came together to cooperate and provide a windfall recovery to unsecured creditors. Ultimately, through the machinations of the bankruptcy case, the settlement proved to be insufficient to […]
Kuney’s Corner – Cram Down: When the Creditor Says ‘No’
The Legal Requirements to Cram Down a Plan on Creditors By filing a chapter 11 petition, the debtor seizes the initiative in proposing a reorganization plan—which is to provide how soon, in what amount and in what manner creditors’ claims are paid.[i] But a debtor does not necessarily get its way. A class of […]
Personal Property Appraisals 101
What You Should Know Before Hiring a Property Appraiser Are you a lender who needs an appraisal of personal property (machinery, equipment and inventory) in connection with making a loan? Are you a company that needs an appraisal in connection with a capital raise, or some other purpose? Regardless of the reason, there are some […]
The Chief Restructuring Officer: Architect, Force, Leader Towards Change
Navigating an Extreme Environment as CRO The position of Chief Restructuring Officer or CRO is not well defined or understood. This role does not have as much history as the more traditional positions such as CFO, CEO or President. In turn, this leaves room for much misunderstanding. The CRO may be thought of as simply […]
Opening the Kimono: Operational and Financial Reporting Obligations at the Outset of a Chapter 11 Case
While providing numerous advantages to the companies that choose to invoke it, Chapter 11 also imposes significant and sometimes burdensome public reporting obligations on them – hence the metaphor of the opened kimono. Because of the debtor’s reporting obligations, creditors and other parties with an interest in the Chapter 11 case (such as potential purchasers […]