Capital structure may not be relevant for a healthy company’s value, but for distressed companies, liquidity and capital structure can be key.

What Should Companies & Restructuring Professionals Know Amid Increased Healthcare Provider Bankruptcies? Healthcare providers face many pressures, including costs associated with regulatory compliance and necessary technological and infrastructure investments. In fact, a PwC report showed a 68% increase in healthcare bankruptcies, with more predicted throughout 2024. It’s important to understand that healthcare restructurings can have unique challenges, which will be discussed below. Healthcare Providers Still Face These Special Issues Among the many factors impacting healthcare providers is the shift to bundled payments for insurance reimbursements. Under the Affordable Care Act […]

An organization that is in distress faces a harsh reality: to attempt to turnaround the business or dispose of it. This existential decision is incredibly time-sensitive, as any delay in action erodes the possibility of a successful recovery. In this article, we will explore the distressed organization and the difficult decisions faced by its stakeholders. We will outline considerations to keep in mind when faced with such a situation. As part of this process, we will also examine short-term survival as a concurrent process of the chosen strategy. The Key […]

Using Your Personal Experience and Expertise to Formulate an Investment Thesis It’s time to take an in-depth look at distressed debt investing and how you can use your personal experience together with company valuation methods to make decisions. Most investors will want to enter the distressed investing space by relying on the expertise of various funds that focus on these types of investments. Thus, I’ll address the constraints an individual investor faces and how one determined to make their picks can gain an advantage over others in the markets. You […]

Author’s Note Appellate rulings in a California bankruptcy case have the potential to upend a bedrock principle of Subchapter V plans. After an apparel company filed for Chapter 11 under Subchapter V because of a judgment it could not pay, its plan to reorganize has bounced between bankruptcy court and the district court since 2020. While the bankruptcy court supports the debtor’s use of Subchapter V’s unique provisions favoring debtors and equity holders, the district court has taken a more creditor-centric view and blocked its plan twice. While thousands of […]

When Corporate Attorney-Client Communication Is 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 all of the debtor’s attorney-client communication, including those communications that the debtor’s principals reasonably believed were permanently encased in a fortress of secrecy. The trustee can thus gain major ammunition for claims against insiders, business partners, vendors, attorneys, accountants, advisors, and others. […]

A Match Made in Heaven? At first blush, cannabis and a legal practice like receivership might seem an unlikely match. Medical and recreational cannabis has steadily grown in acceptance and legalization over the past decade in the United States. However, there are times when cannabis businesses face insolvency and need a legal solution. As of right now, cannabis companies are not eligible for bankruptcy protection. In many cases, the groups they make payments to are also not eligible. This affects not only the companies but also the employees and their […]

Secured creditors and buyers of distressed assets don’t have to worry about courts limiting their credit bids, but one Delaware case is cause for concern.

A composition agreement is an out of court agreement between the debtor and two or more creditors regarding payment arrangements on a debt.

When a seller of real property files for bankruptcy the purchaser has rights under the bankruptcy code and as an executory contract.