Multiple Debtors: Best Practices for Corporate Governance in Multi-Debtor Cases
This panel discusses how to make sure management (and the board) plays the role of neutral stakeholder throughout a plan and/ or § 363 process. Can the same board and management team truly represent the interests of stakeholders of BOTH a corporate parent and its subsidiaries? What if there are dozens of affiliates whose creditors have disparate interests? Why is the issue of corporate separateness (and related conflicts) overlooked in some multiple-debtor cases, but addressed in others? What are the pros and cons of various tools for addressing potential conflicts? Who should investigate when issues are raised about the validity of intercompany debt, the reasonableness of cost allocations, the ownership of intellectual property and the potential for fraudulent conveyance claims among debtors? Examples discussed include Nortel, Caesars, EFH, Lehman, Tribune and others.