Financial Advisors and Investment Banking

Structuring Cross-Border Deals to Protect Creditor Interests

Chapter 7: Navigating Life as a Financial Advisor in Bankruptcy’s Rabbit Hole

It will come as no surprise to anyone in the bankruptcy and corporate restructuring world over the last few years that the overall number of bankruptcy filings has steadily declined since 2010. Statistics maintained by the Administrative Office of the U.S. Courts[1] demonstrate that the total number of bankruptcy petitions that have been filed has decreased from approximately 1.6 million in 2010 to fewer than 940,000 in 2014.

Defending Preference Actions: Are the Rules Fair?

Section 547 of the Bankruptcy Code allows a debtor to avoid and recover transfers that were made in the 90 days prior to filing for chapter 11, provided that the payments meet certain criteria. This criteria can include the following: (1) the payment was made to or for the benefit of the creditor in the form of cash or goods; (2) the payment was for a prior debt (not cash-on-delivery or cash-in-advance); (3) the debtor was insolvent;

Northern District of California Weighs In on the Debate about Retaining CROs

On March 28, 2014, the U.S. Bankruptcy Court for the Northern District of California denied the debtor’s motion in In re BR Festivals LLC[1] to employ a chief restructuring officer (CRO) as part of the chapter 11 liquidation of the debtor’s estate. The court provided an additional wrinkle in attempting to retain a CRO.

Real Estate Bankruptcy Interest Rates under Till

In real estate bankruptcy proceedings, the determination of a post-bankruptcy interest rate is often a critical element of the repayment or restructuring plan. The appropriate rate is typically not one that can be observed or obtained in the regular markets — the debtor in possession is already in bankruptcy and consequently, a commercial loan is very likely unfeasible. The U.S. Supreme Court provides guidance to addressing this issue in Till v. SCS Credit Corp., which states that:

Weekly Cash Flows Analyses: Why aren’t they a “best practice”?

A major part of the anatomy of a turnaround is the weekly cash flow. A deceptively simple exercise, it presents a powerful tool for supporting complex management decisions. Applied during a restructuring process in a myriad of circumstances, it can serve as a basis for valuation from free cash flow or the foundation of a plan of liquidation. The usefulness of a weekly cash-flow analysis is agnostic to the subject business or industry.

New AIRA Standards: A Guide to Best Practices When Offering Opinions of Value

The Association of Insolvency and Restructuring Advisors (AIRA) released its new “Standards for Distressed Business Valuation,” which went into effect on March 1, 2014,[1] and will provide the best practices for valuation professionals.

How Resolution Planning has impacted Financial Institutions

Editor’s Note: This article provides a general overview of the current state of financial institutions’ resolution planning as required by the Dodd-Frank Act and is the first in a series of related articles.

With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) in 2010, there is no denying that life as it was known at the time for large financial institutions was inexorably changed.

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Financial Advisors and Investment Banking