We hope this report finds you and your family doing well. 2021 was another year of lockdowns and Zoom meetings, but also COVID-19 shots and slowly returning to the real world. Our committee leadership has strived to help its members navigate the ever-changing world of distressed sales via access to helpful content and the opportunity to engage in discussions on topics relevant to asset sales. Below are a few highlights of the committee’s activities over the past year.
Asset Sale of the Year Award
This past summer, our committee named the winners of the Third Annual Asset Sale of the Year Award. The award is given to a sale that provided stakeholders with value, displayed excellence from start to finish and was of strategic or legal significance and impact. This year’s award went to In re Verity Health System of California Inc., Case No. 2:18-bk-20151-ER (C.D. Cal.), which Samuel R. Maizel and Tania M. Moyron of Dentons nominated. The committee selected Verity as the top asset sale because the sale (1) was part of one of the largest hospital bankruptcies ever filed, (2) established important precedent regarding the transfer of Medicare and Medicaid provider agreements in a bankruptcy case and the limited scope of the California Attorney General’s powers over the sale of nonprofit health care assets in bankruptcy, and (3) saved important institutional hospitals, preserving thousands of jobs and ensuring that residents in these counties and communities continue to have access to critical health care. Honorable mentions were awarded to the asset sales in In re Southern Foods Group LLC, et al. (S.D. Tex.), submitted by Brian Resnick of Davis Polk & Wardwell LLP, and In re OGGUSA Inc., f/k/a GenCanna Global USA Inc. (E.D. Ky.), submitted by Michael Boyer of Huron Consulting Group, Inc.
Conference Programs
For the 2021 Annual Spring Meeting, our committee partnered with the Bankruptcy Litigation Committee to present “Cautionary Tales in Asset Sales” This panel discussed Neiman Marcus (collusion), as well as regulatory and ownership issues that arise in asset sales leading to litigation. Panelists included Liz Boydston of Polsinelli, Michael Bujold of the U.S. Trustee’s Office, Joel Cohen of Gibson, Dunn & Crutcher, Isley Gostin of Wilmer, Cutler, Pickering, Hale & Dorr, and Chad Husnick of Kirkland & Ellis.
For the 2021 Winter Leadership Conference, the committee partnered with the Financial Advisors & Investment Banking Committee to present “Can Someone Please Tell Me What to Do?” How Best to Sell Your Assets. This panel discussed how to choose the best way to effectuate a sale, such as § 363, Article 9 or assignments for the benefit of creditors. The panelists devised three scenarios and debated which method they believe is the best, and why. Panelists included Dawn Ragan of CR3 Partners, James Decker of JDecker & Co., Inc., and Sara Beth Wilson of Phelps Dunbar, with Matt LoCascio of SC&H Capital moderating.
Newsletters
In 2021, the committee published four newsletters, which contained a number of well-researched articles on diverse topics involving asset sales, including “Sales Under Subchapter V of Chapter 11,” “What Is Collusion in a § 363 Auction?,” “The Sins of the Father: Successor Liability in § 363 Sales,” “The Stalking Horse: To Be or Not to Be?,” “Bring Me a Higher Bid: The Highest or Best Standard for § 363 Sales,” “Attention Buyers of Assets in Bankruptcy: How to Be a Good-Faith Purchaser and Ensure that Any Post-Closing Challenges Will be Dismissed as Statutorily Moot Under § 363(m) of the Bankruptcy Code” and “Sixth Circuit Underscores the Importance of Due Process in § 363(f) Sales.” The newsletters are available on the committee’s webpage.
Webinar
On Feb., 10, 2021, our committee and the Ethics and Professional Compensation Committee co-sponsored a webinar titled “Navigating Ethical Issues During Asset Sales.” More than 150 attendees registered to hear our panelists, Steve Blank of King and Spalding, Joe Briggett of Lugenbuhl and Ken Mann of SC&H Capital, discuss ethical issues professionals may face in asset sales while weaving in some very entertaining real-life stories from previous deals. Evelyn Meltzer of Troutman Pepper served as the moderator and engaged the panelists in a lively debate and discussion on collusion and fiduciary responsibility. The conversation went for over an hour and addressed real-world issues that arise in these situations, which provided for an entertaining session.
We are planning a webinar for January 2022 to discuss one or more of the topics from our recent newsletter articles.
Asset Sales Committee Member Meeting
The Asset Sales Committee held a virtual meeting of its members on June 21, 2021. At the meeting, the committee updated its members on the committee’s efforts during the first half of 2021 and announced the winners of the Third Annual Asset Sale of the Year Award. The meeting also provided committee members with a chance to network with one another. Additionally, the committee hosted a member mimosa event with the Financial Advisors and Investment Banking Committee at the Winter Leadership Conference. Finally, the committee will be holding a virtual meeting in January to discuss plans for 2022 and to allow committee members the opportunity to network.
ABI Virtual Happy Hour
On Nov. 3, 2021, the committee hosted an ABI Virtual Happy Hour with a travel theme — encouraging attendees to get back out there and explore, something many of us have missed doing. Committee leadership discussed their favorite trip/destination, then ABI members were encouraged to continue with the theme of travel in their breakout rooms, including their favorite trips/destinations or upcoming trips.
Member Success Stories
In a continued effort to highlight the work and success or our committee members, the committee will be seeking on a regular basis member updates related to asset sales. If you have something to report, click here. We would love to hear from you and to include your success story in an upcoming email, newsletter or committee meeting.
Submit Asset Sale of the Year Nominations for 2022.
Planning for 2022
As co-chairs, we thank all members for their support and continued participation on the Asset Sales Committee. The committee is really only as good as its members and their contributions. In that vein, the committee is always looking for contributors to its newsletter, suggestions for presentation topics, or help producing webinar content. If you are interested in contributing to the committee, please reach out to any of the committee leaders. We also invite you to share with us any other questions or thoughts you may have regarding the Asset Sales Committee or ABI in general. We wish you and your family health, success and happiness in 2022 and hope that we will get to see you in person this year.
—Evelyn Meltzer and Alicia Bendana
ABI Asset Sales Committee Co-Chairs