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Professionals – Retention/Compensation/Fees

Like a professional fee carve-out, secured creditors may also agree to a carve-out for unsecured creditors to appease the court and creditors’ committee.

When is a business turnaround no longer viable? Ask these questions to determine if you or your client’s business can be saved.

It’s typical for secured lenders in a chapter 11 case to set aside a portion of the proceeds of its collateral to pay professional fees. Understand what you may need to know about carve-out fees.

A creditor may seek appointment of a chapter 11 trustee in replacement of the debtor in possession, but there are special considerations to make first.

Examining the “Fiduciary for Hire” and the NRA’s Bad Faith Bankruptcy “When in doubt, mumble, when in trouble, delegate, when in charge, ponder.” – James H. Boren, When In Doubt, Mumble: A Bureaucrat’s Handbook (1972) Business entity debtors in chapter 11 cases come in all shapes and sizes, with varying degrees of integrity and competence in managing those entities. Debtor’s professionals, while arguably also fitting those parameters, must play the cards they are dealt—usually in financially urgent circumstances—and make real-time strategic decisions with real-world consequences. When questions arise as to […]

Considerations for Companies in a Cash Crisis A liquidity crisis is a severe financial situation in which a company does not have enough cash or cash-convertible assets, which can lead to defaults and bankruptcy. Managing cash is critical when working to preserve or maintain solvency in order to maximize opportunities for a successful turnaround or corporate restructuring. Near-Death Liquidity Is Like a Melting Ice Cube Insufficient liquidity shrinks the range of options for a financially distressed business. The metaphor of a melting ice cube is often used to illustrate this […]

An Introduction to the Distressed Company’s Superman: 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 CRO to the Bankruptcy Reform Act of 1978 (the “1978 Act”). The 1978 Act created “a unified reorganization chapter [chapter 11] that is fundamentally grounded in the presumption that pre-bankruptcy management will […]

Does Corporate Counsel Represent the Executive or the Company? The F-Squared Investments Bankruptcy is a Warning for Executives [Editor’s Note: Russell C. Silberglied ([email protected]) is a director of Richards, Layton & Finger, P.A. The views expressed in this article are those of the author and not necessarily those of Richards, Layton & Finger or its clients. Mr. Silberglied and RL&F represented F-Squared in its chapter 11 case, but were not counsel of record in the SEC action described in this article.]   What exactly does it mean when a company’s […]

The Finishing of the “Unfinished Business” Doctrine and the Jewel Waiver One of the interesting aspects of business bankruptcy cases is that both the businesses and the issues their bankruptcy proceedings present can differ so much. In recent years, for example, we have seen department stores (Macy’s, Federated), toy retailers (Toys R Us), bookstore chains (Borders), automobile manufacturers (GM, Chrysler), supermarkets (A&P), auto supply companies (Delphi), securities firms (Lehman Brothers), oil and gas E&P companies (Ultra Petroleum, Energy XXI), telecom outfits (WorldCom, Adelphia), and energy companies (Enron, EFIH) file for […]

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 of your answer, if what you’re after is a tour of the turnaround, restructuring, and insolvency industry (the “Industry”), you came to the right place. A Little History About Law & Economics The Industry began […]