Many have reviewed the U.S. Supreme Court’s Till Opinion (Till v. SCS Credit Corp.) and walked away shaking their heads in confusion. The underlying case involved a higher-risk borrower who had purchased a used truck and shortly thereafter filed for bankruptcy under chapter 13. The parties asked the Court to choose the best method to determine a cramdown interest rate. It is important to realize that the Court was not addressing an all-inclusive list of methodologies available to financial practitioners, but was choosing from four methodologies previously used by various bankruptcy courts.
I am not an investment banker, so I’ve never had the benefit of really knowing what goes on in the head of one when deciding whether to take a particularly risky sell-side 363 sale engagement. But I have been through a few of these situations as an observer (or an attorney for one party or another), and, over time, I’ve seen something of a theme emerge: investment bankers underestimating—or co
One of the most significant challenges in managing a company through a restructuring, whether in or outside of chapter 11, is ensuring that critical vendors continue to provide goods and services to the company.
Many turnaround experts believe that the key to fixing a distressed manufacturing company requires quickly turning assets, including idle factories or other underutilized facilities, into cash while simultaneously reducing expenses. However, selling a factory may not always be the best way to obtain value or minimize the costs associated with that asset.
Section 505 of the Bankruptcy Code allows trustees of debtor companies the opportunity to have a bankruptcy court potentially determine the amount of all tax liabilities during the course of a bankruptcy case.
The Bankruptcy Code strives to reach a balance between giving the debtor flexibility in making daily business decisions while at the same time limiting those activities which are deemed to be outside the ordinary course of business.  This limitation generally comes in the form of judicial oversight.
Over the past year, much has been written about the coming “wave” of debt maturities; to add to the drama, some call it a tidal wave and others a tsunami. Regardless of the label that one uses, there is no dispute that several trillion dollars of debt will be coming due in the next few years.
With the stock market up by 18.9 percent through the end of November 2009 and “signs” of recovery on the horizon, financial institutions throughout the world continue their quarterly, if not monthly, chore of estimating loan loss reserves during the most challenging times in recent economic history.
Some potential buyers of distressed companies may be sitting on the sidelines, waiting for the economic cycle to shift to growth mode so they can return to acquisitions, but some of the most recognized names and most prized assets in the nation have landed in bankruptcy during 2009 due to liquidity constraints, too much leverage, operational issues, etc.
Young Conaway Stargatt & Taylor, LLP
CR3 Partners LLC
Pack Law, P.A.
Fort Lauderdale, FL
O'Melveny & Myers LLP
San Francisco, CA
Special Projects Leader
Fox Rothschild LLP