This dynamic session will deliver practical guidance to corporate restructuring professionals when cryptocurrency is part of a Chapter 11 matter. Panelists will discuss how to effectively identify case assets, handle creditor distributions, manage community management, and oversee media interest, among other areas.
Participants will gain valuable insight into practical case management involving cryptocurrency. Attendees will learn about best practices for effective case resolution, along with pitfalls to avoid.
Business
Suggested Speakers
This session will provide a comprehensive understanding of the Business Judgment Rule (BJR) as it applies to corporate governance, with a specific focus on how directors and officers can navigate potential litigation. The session will start with a foundational overview of the BJR, followed by an in-depth analysis of the key legal cases that have shaped its application. Additionally, the session will delve into the strategies for advising corporate clients—particularly directors and officers—on how to avoid becoming targets of litigation, including the role of independent board directors in mitigating risk.
Session Structure and Key Topics:
1. Introduction to the Business Judgment Rule (BJR)
Objective: Provide a foundational understanding of the BJR and its role in corporate governance.
- Definition of the BJR and its purpose in protecting directors and officers from liability.
--- The BJR presumption: when courts defer to the decisions of corporate leaders.
--- Key elements required to invoke the BJR: good faith, rationality, and lack of conflicts of interest.
--- Key areas where the BJR applies: financial decisions, strategic direction, and operational oversight.
2. Key Legal Cases Shaping the Business Judgment Rule
Objective: Explore the landmark cases that have defined and evolved the application of the BJR.
- Smith v. Van Gorkom (1985): The duty of care in decision-making and its relation to the BJR.
- Aronson v. Lewis (1984): The standard for judging board decisions and establishing the BJR presumption.
- In re Caremark International Inc. Derivative Litigation (1996): The BJR's application in oversight and monitoring duties.
- Stone v. Ritter (2006): Examining the role of good faith and the implications for directors' oversight responsibilities.
- Directors' duty of loyalty vs. duty of care: Understanding the balance and how courts distinguish between them.
3. Litigating Business Judgment: Defending and Pursuing Claims
Objective: Offer insight into the litigation landscape for D&O claims and how the BJR impacts defense and pursuit of litigation.
- Litigating under the BJR: When the rule can be overcome by plaintiffs and how courts assess the decision-making process of directors.
- Strategies for defending directors and officers in lawsuits, including the use of the BJR as a key defense.
- How plaintiffs attempt to overcome the BJR (e.g., allegations of bad faith, lack of independence, or conflicts of interest).
- Case studies and trends in shareholder derivative suits and class actions.
4. How to Advise Directors and Officers to Avoid Becoming Targets of Litigation
Objective: Discuss proactive strategies for corporate advisors to help directors and officers avoid litigation exposure.
- Best practices for documenting decisions to ensure alignment with the BJR.
- The importance of maintaining a robust conflict-of-interest policy and board independence.
- Key governance practices that mitigate risks: regular board evaluations, clear delegation of authority, and transparency in decision-making.
- Ensuring compliance with statutory and fiduciary duties—particularly in distressed situations.
- The role of internal and external advisors in helping directors navigate complex situations.
5. The Role of Independent Board Directors in Mitigating Risk
Objective: Highlight the importance of independent directors in protecting the organization and its leadership from litigation.
- Defining the role and responsibilities of independent board members.
- How independent directors help reinforce the BJR in decision-making processes.
- The critical role of independent directors in distressed or bankruptcy situations.
- Best practices for selecting, empowering, and working with independent board directors to safeguard against personal liability.
Target Audience:
General Business Bankruptcy Counsel | Corporate Governance Professionals | Directors and Officers (D&O) | Litigators specializing in corporate governance and D&O cases | Financial Advisors specializing in distressed situations and workouts | CROs
Learning Objectives:
- Gain a comprehensive understanding of the Business Judgment Rule and its importance in corporate governance.
- Analyze major legal cases and their impact on the application of the BJR.
- Develop strategies for defending and pursuing litigation involving directors and officers.
- Learn proactive strategies for advising directors and officers to minimize the risk of personal liability and litigation.
- Understand the importance of independent board directors in mitigating risks for directors and officers.
Business
Suggested Speakers
This session will review the issues associated with the restructuring of cross-border cannabis entities through state-level remedies such as receiverships and assignments for the benefit of creditors. Relying on recent case studies, the panel will explore the impact of state-level regulatory regimes and other factors on the selection of remedy.
Participants will leave the session with an understanding of (a) state-level remedies available to assist distressed cannabis companies and (b) how to evaluate the utility of each given the regulatory regimes in the jurisdictions where the company operates.
Debtor
Richard
Williams
rwilliams@brileyfin.com
B. Riley Advisory Services
In high profile restructurings, managing public perception and crafting a go-forward narrative matters. This session explores how strategic communications play a critical role in mitigating reputational damage and preserving brand and estate value throughout the restructuring process, including positioning the company for success upon emergence.
We will explore the importance of:
- Developing a comprehensive communication strategy to address various stakeholders (employees, partners, media, etc.) and preserve enterprise value
- Being prepared to implement aspects of the strategy even before filing (given propensity for leaks) and during key moments of the process through emergence
- Communicating effectively to promote business objectives, shape public perception, support legal strategies, and stabilize key stakeholder relationships
- Proactively (and reactively) addressing misinformation, media inquiries and stakeholder concerns to protect the brand and franchise
- Learning from real-world examples of communication efforts in major bankruptcies
Participants will be able to understand:
- The role strategic communications play in preserving value of the brand and business, including keeping internal and external parties apprised and on side
- The importance of crafting clear, forthright, consistent and timely messaging
- The ways in which strategic communications can significantly influence the outcome of a restructuring process
This session will introduce participants to the very hiogh likelihood that digital assets could be a part of a bankruptcy estate given the rapid growth in the use of digital assets to transact business and in the number of people in the United States that own digital assets. Participants will be made aware of the resources, tools, and professional services available to locate, track, quantify, value and recover digital assets for the bankruptcy estate.
1. Participants will gain a working understanding of blockchain technology, cryptocurrencies and other digital assets and their rapid adoption by individuals and businesses.
2. Participants will learn to identify signs that a party may possess digital assets and will be familiar with the resources available to aid in discovering and identifying digital asset ownership.
3. Participants will learn about the techniques and tools available to trace and recover digital asset transactions.
4. Participants will learn the basic issues and challenges in valuing digital assets.
Creditor
Note to Committee
Beverly Berneman, Frank Oswald, and I (Summer Chandler) are working on the second edition of the ABI book, Choppy Waters: Navigating the Intersection of Bankruptcy and Intellectual Property. It should be ready to go to print by the end of this year. We would like very much to have the opportunity to present at the Spring Meeting on some of the issues we will be discussing in the book and that we have encountered in our practices or other work. Thank you for considering our proposal.
Panel Description:
Intellectual property is often critical to the financial stability and well-being of a company. When a debtor enters bankruptcy, the Bankruptcy Code contains several provisions that impact rights held by the debtor, or others, in intellectual property owned or used by the debtor. Given the important role that intellectual property often plays in the life of a business, disputes pertaining to intellectual property frequently surface in the context of the debtor's bankruptcy case. Unfortunately, significant uncertainty continues to surround many of the issues that exist at the intersection of bankruptcy law and intellectual property law.
This panel will explore the complex intersection of intellectual property and bankruptcy law, focusing on the important and unique challenges and opportunities that can arise when intellectual property rights are at issue in bankruptcy proceedings. The topics discussed will include, among others: the effect of the rejection of an intellectual property license agreement, the effect of the sale of a debtor’s intellectual property on the rights of non-debtor licensees, and the assignability of intellectual property license agreements (either standalone agreements or agreements contained within a more comprehensive agreement – such as a franchise agreement). Panelists will discuss and analyze several important and interesting disputes, including, among others, the tortured bankruptcy history of 2 Live Crew/Luther Campbell and Lil’ Joe Records.
By the conclusion of the program, attendees should: (1) understand the legal framework governing the treatment of intellectual property assets in bankruptcy; (2) recognize risks and challenges related to intellectual property in bankruptcy, and (3) be able to assess the potential impact of bankruptcy on ongoing and future intellectual property transactions.
Business
In the aftermath of Purdue Pharmaceuticals it is clear that non-debtors releases in reorganization plans under chapter 11 and, most likely Chapter 12, require the releases to be "consensual." This invokes general principals of contract law which require, inter alia, consideration for the releases. Insiders, like the Sacklers in Purdue, can contribute cash or equity. Insurers, guarantors, and similar parties can similarly fund the releases. However, it is not clear how administrative persons can contribute "consideration" for releases especially where Secs. 326-31 largely govern types of claims that might be asserted against these persons. The Barton doctrine also provides a framework for asserting claims against many of these persons and an obligation for the court to raise claims against such persons even if her parties in interest do not.
Given the pre-Purdue inclusion of boilerplate provisions in many plans for releases of the various counsel and other case administrators, the issue arises under Purdue whether or not such releases are possible post-Purdue and how that might be obtained if they are possible.
In a post-Purdue world, counsel, other professionals and committees in reorganization cases may well face significant increased exposure to claims and liability where they may not be able to obtain releases for such claims and liability. Strategies to deal with this change are of obvious import to those attendees and those professionals they deal with in the course of reorganization cases, particularly those in which there is dissatisfaction with these individuals' actions. E.g, The Asarco case in which the reorganized debtor sued its predecessor's former counsel.
Business
Suggested Speakers
Leo
Weiss
leoweiss@ecentral.com
Retired, formerly with he U.S. Trustee Program
Parties in large, complex bankruptcy cases routinely retain local counsel when that party's primary counsel has no office or attorneys licensed in a particular venue. Local counsel can provide critical support in these cases--to creditors, committees, groups, and debtors--including having local knowledge, well-formed relationships in the venue, and familiarity with other professionals and the court.
But hiring local counsel can present myriad issues with retention, compensation, and, in particular, ethics. Many courts have strict rules on hiring local counsel, including some jurisdictions that require local counsel to play a substantive role in the case (as opposed to simply signing/filing pleadings), including attending all depositions and hearings. There may be many landmines waiting for both local and outside counsel, depending on the jurisdiction.
This panel would discuss the benefits of local counsel, things to avoid, and ethical/compensation related issues. The panel could consist of an attorney that often serves as local counsel, an attorney that often hires local counsel as outside counsel, and a judge that frequently sees retention of local counsel (to provide that judge's views on what works, what doesn't, and things to avoid).
This panel would discuss the benefits of local counsel, things to avoid, and ethical/compensation related issues. The panel could consist of an attorney that often serves as local counsel, an attorney that often hires local counsel as outside counsel, and a judge that frequently sees retention of local counsel (to provide that judge's views on what works, what doesn't, and things to avoid).
Business
Tim
Anzenberger
tim.anzenberger@arlaw.com
Adams and Reese LLP
This session will discuss bankruptcy issues that arise in connection with financing structures common at various stages in the growth of life sciences company, including early stage venture lending , drug development lending, royalty monetizations, and synthetic royalties/revenue interest financings and other hybrid finance structures. Bankruptcy issues include treatment of rights in IP and licensed IP as collateral and under royalty sale structures; executory contract issues with respect to material contracts related to recovery of value of financing (e.g., supply contracts for manufacture of drug); secured or unsecured status under synthetic and hybrid structures; and structuring deals to mitigate bankruptcy.
Recent cases will be discussed to illustrate the features of common structures and treatment of bankruptcy risks and issues by courts (cases include PhaseBio, Mallinckrodt and Clovis).
Participants will understand the general features of these life sciences financing structures, the bankruptcy risks involved, how to avoid or mitigate risk in the structures prebankruptcy, and likely outcomes in the event of a challenge to the structure in bankruptcy. Target audience is life sciences companies and their lenders.
Creditor
The Supreme Court's June 2024 decision in Truck Insurance Exchange v. Kaiser Gypsum Company held that insurers qualified as "parties in interest" under Section 1109(b), entitling those insurers to object to a plan of reorganization. This landmark decision is likely to have far-ranging effects in the reorganization world and affect debtors and creditors committees alike. The ABI should host a panel examining the expected extent and impact of those effects, including that:
- debtors and creditors should prepare for the fact that insurance carriers will start getting a seat at the negotiating table;
- the insurance industry may view Truck as not merely granting a seat at the table, but also as an invitation to test the boundaries of its newly granted position;
- Truck presents an existential threat to the already-risky tack of chapter 11 plans' limiting director and officer liability to only insurance proceeds;
- insurance carriers will likely leverage Truck to urge courts in jurisdictions that deem insurance proceeds to be property of the estate to reexamine the status quo; and
- insurance carriers will begin to horse-trade for concessions in connection with first-day motions and debtors' purchasing tail coverage and run-off policies post-petition.
Participants will gain knowledge and skills vital to negotiating insurance-related issues in bankruptcy, such as:
- traps for the unwary in attempting to limit liability in chapter 11 plans to only insurance proceeds;
- how to maximize or minimize Truck's reach in their next plan negotiation, depending on whether their goal is to tout or downplay its effects; and
- how to navigate coverage issues if insurance carriers are granted a seat at the table during their next plan negotiation.
Debtor
