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Chapter 11 Plans
When Your Customer Files for Bankruptcy
You Still Have Options In the Event of a Customer Bankruptcy When a customer files for bankruptcy, vendors with debts owed by the customer/debtor that arose before the commencement of the case (the “Petition Date”) can be exposed to considerable losses. Once the case is filed, the vendor becomes a creditor with a claim against […]
A Chapter 11 Debtor Need Not Be Broke
A Solvent Debtor Is Not an Oxymoron Suppose that your borrower or customer files a chapter 11 case.[i] You do not like this because you’ll almost certainly not collect the full amount owed to you and to get anything you’ll have to get involved with a bankruptcy case and hire attorneys. Your discontent becomes fury […]
90 Second Lesson: To Stalk or Not to Stalk? Why be a Stalking Horse Bidder?
QUESTION: Jamie S. emailed recently, asking “Can you please sum up the pros and cons of serving as the “stalking horse” in a bankruptcy sale? ANSWER: Yes, Jamie, we can. A stalking horse bidder plays an important role in many bankruptcy acquisitions, and one of the most important decisions confronting a purchaser in a bankruptcy acquisition […]
Dealing With Distress For Fun & Profit Installment 19 – Chapter 11 Plan Acceptance, Getting a Class to Accept a Plan
A written tour of business bankruptcy and its alternatives. This is the latest in the series, Dealing with Distress for Fun & Profit, which you can read from the beginning if you like1. Our last installment focused on the basics of confirming a plan. In this installment, our fearless authors drill down into the various […]
What do Secured Lenders Want? The Basics of Loan Forbearance Agreements
When a borrower defaults on its loan agreements,[i] a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a loan forbearance agreement. If the borrower can convince the lender that, within a reasonably short […]
Opportunities in Bankruptcy: Turning Coal Into Diamonds
“The time to buy is when there’s blood in the streets.” – Baron Rothschild Don’t Panic, There Are Many Opportunities in Bankruptcy When a client or a competitor files for bankruptcy, it is natural to reflect on the downside. What’s going to happen to my outstanding receivable? Is the market primed for a downturn? How […]
Dealing with Distress for Fun & Profit— Installment #18—How to Confirm a Chapter 11 Plan
A written tour of business bankruptcy and its alternatives. This is the latest in the series, Dealing with Distress for Fun & Profit, which you can read from the beginning if you like. In this bat-installment, we turn to what is, theoretically, one of the most important parts of any chapter 11 case: confirming a […]
A Primer on the Chief Restructuring Officer (CRO)
A Brief History of the Chief Restructuring Officer The role of a Chief Restructuring Officer (“CRO”) is approximately four decades old. While still a somewhat new role in the 1990s, CROs are now ubiquitous in the restructuring community. Todd Zywicki, a George Mason law professor who specializes in bankruptcy law, traces the origin of the […]
Battling Bankrupt Bargains – A Non-Debtor Perspective on Executory Contracts
mong the most powerful and best known tools the Bankruptcy Code provides a debtor is the ability to reject burdensome contracts or to assume (and potentially assign) valuable contracts. From the perspective of non-debtor counterparties to such contracts, it may seem that the Bankruptcy Code stacks the deck against them. The well-publicized spike in retail bankruptcy cases has highlighted the treatment of leases of non-residential real property (i.e., store leases).
The “Absolute Priority Rule” and Other “Rules” of “Priority” in Bankruptcy
Are They Really “Absolute,” Are They Really “Rules,” and Do They Always Provide “Priority” to Some Claimants Over Others? At its core, corporate bankruptcy addresses the problem of the “inadequate pie.” While occasionally the debtor will be solvent, in most cases, the debtor will, for lack of a better term, be “bankrupt”—that is, it won’t have […]