There has not been much written or said about the effect of a class action of creditors. Can a class action obtain a class vote on a chapter 11 plan that supplants the votes of individual creditors? If so, then does class counsel and the class representative supplant the creditors committee and its counsel as the party with whom the debtor must negotiate a consensual plan? Does it matter if the class action was pending prepetition or whether a new class action was commenced as an adversary proceeding under the Bankruptcy Rules? Does it matter if the class is or was certified? What about a defendant class (as the debtor sought to be formed among parties sued by the debtor in the MA Telex Free case), rather than a plaintiff class - does that matter to any of these issues?
I was involved in a chapter 11 case representing a putative class. There is very little law on this subject. Academically, there is some analysis fo the similarities between a non-bankruptcy class action case and a bankruptcy case, but very little in the way of case law. Going forward, I always look for opportunities to assert a class action to test some or all of these issues, particularly whether the class can file a class claim.
Creditor
Suggested Speakers
Jeffrey
Sternklar
jeffrey@sternklarlaw.com
Jeffrey D. Sternklar LLC
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
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
This session will focus on key issues in a health care restructuring or bankruptcy from a creditor's point of view. It will address issues pertaining to both secured and unsecured creditors. Possible topics include: (1) understanding ways health care businesses are financed (receivables financing, municipal bond financing); (2) bankruptcy alternatives (receiverships, ABC, workouts); (3) DIP financing for health care businesses; (4) anticipating regulatory review; (5) issues concerning health care 363 sales; (6) issues facing committees in health care bankruptcy cases; and more.
The session will help attorneys who represent creditors understand some of the main issues their clients face with respect to distressed health care businesses and strategies for protecting their interests as the debtor goes through a Chapter 11 case.
Creditor
Join our panel of industry experts for an insightful discussion on navigating the complex landscape of accounts receivable (A/R) management. This session aims to provide attendees with comprehensive insights into key considerations, challenges, and innovative strategies within the A/R space.
The primary focus of this panel is to explore how organizations can maximize value in their A/R portfolios. Our experts will delve into crucial aspects of A/R management, offering attendees a holistic understanding of risk analysis, portfolio purchasing, liquidation, debt collection, and international recovery.
Key Points and Supporting Topics:
• Risk Analysis in A/R Portfolios: Understand the methodologies and techniques employed for accurate risk analysis. Explore the impact of customer payment patterns, industry trends, and economic factors on portfolio performance.
• Portfolio Purchasing and Liquidation Strategies: Gain insights into successful portfolio management, acquisition, and liquidation. Learn innovative approaches to handling principal investments and overseeing significant assets.
• Effective B2B Debt Collection and International Recovery: Discover advanced analytics and modeling strategies for enhancing debt collection processes. Navigate the challenges of international debt recovery with industry-tested expertise.
• Comprehensive Approach to Bridging Business and Credit Lenders: Delve into strategies that bridge the gap between businesses and credit lenders. Maximize the value of assets within the A/R space through thoughtful and comprehensive approaches.
Attendees will leave this panel discussion equipped with actionable insights, best practices, and a deeper understanding of the evolving landscape of A/R management. Whether you are involved in risk assessment, portfolio management, or debt recovery, this session promises to be a valuable resource for professionals seeking to optimize their approach to accounts receivable.
Business
Suggested Speakers
Jay
Stone
JStone@hilcoglobal.com
Buddy
Beaman
BBeaman@hilcoglobal.com
Julia
Lechowicz
jlechowicz@hilcoglobal.com
Hilco Global
Many bankruptcy professionals are being called upon to help healthcare provider organizations as this industry faces unprecedented business distress. Whatever the professional's role, some basic understanding of healthcare finance can strengthen decision-making and performance.
This session will provide a high-level view of the unique fiscal considerations in the healthcare provider organization, specifically: 1) accounting and financial statements; 2) cashflow including the massive revenue cycle and accounts payable functions; 3) a murkier part of cashflow buried in the various governmental and private payer reimbursement models, and 4) fraud.
Beginning with accounting and financial statements, the mystery of gross revenue, net revenue, and accounts receivable on the income statement will be examined. Even experienced healthcare CFOs can trip up on accounts receivable calculations given the complexities of payer reimbursement models and payment practices, as well as the payer market changes occurring at an ever-faster pace.
Healthcare provider cashflow management consists of voluminous variations and constant change, more so in revenue cycle but also in accounts payable. Years ago, revenue cycle was simply called “billing.” The term revenue cycle more accurately describes the revenue generation process which can involve every function in the healthcare provider organization, from physician and nursing care to lab work and housekeeping.
Third, fundamentals of the most common healthcare reimbursement models will be discussed starting with basic fee-for-service reimbursement and moving through other models to the present attempts at value-based reimbursement. It may be surprising that while the industry grapples with the new value-based models, a sizable part of reimbursement is still fee-for-service.
Finally, there will be brief mention of fraud and embezzlement which can develop in the troubled healthcare provider organization and may be a significant contributor to poor financial performance.
Participants will gain a high-level perspective on the unique fiscal considerations in the healthcare provider organization to inform their work in advising clients in this troubled industry. A solid base of knowledge in healthcare finance will support accurate financial performance projections, prioritization of turnaround strategies, and organization valuations. Given the esoteric complexities in this field, attendees will also gain an appreciation for situations where using healthcare financial specialists may be helpful.
First, participants will understand special aspects of income statements for healthcare provider organizations, in particular the difficulty of estimating accounts receivable due to the variability in the payer market, reimbursement models, and billing policies and procedures.
Second, attendees will be able to discuss the umbrella structure of cashflow in the healthcare provider organization from revenue generation to accounts payable.
They will understand the fundamentals of the “revenue cycle” which spans the entire healthcare provider organization. They will also be able to outline some mid-level billing functions, common operational problems with billing in the distressed healthcare organization, and practical solutions to address them, including artificial intelligence (AI).
On the other side of cashflow management, participants will understand the cash management structure and issues in vendor contracting, purchasing, and accounts payable in the healthcare organization.
Next, participants will gain a deeper awareness of how various healthcare reimbursement models in the marketplace – e.g., Medicare Advantage, health maintenance organizations (HMOs), high-deductible plans, accountable care organizations (ACOs), etc. – affect the financial performance of healthcare provider organizations.
Finally, attendees will be made aware of some places fraud and embezzlement may develop in the distressed healthcare organization.
Creditor
Jeanne
Goche, MA, JD
jgoche@SolutionsinHealthCareManagement.com
Solutions in Health Care Management, a consultancy and financial advisory specializing in health care
There is a clear split of authority on this issue, with the First, Second, and Third Circuits in the majority, and the Fifth Circuit (and me) in the minority. See In re Bal Harbour Quarzo, LLC, 638 B.R. 660 (Bankr. S.D. Fla. 2022).
Attendees will hear arguments on both sides of this issue, including policy and practical concerns raised by each position.
Business
