Bankruptcy Process and Procedure

Health Care Bankruptcy & Restructuring for Creditors

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 Suggested Speakers Jeffrey Fuller jfuller@bloombergindustry.com Bloomberg Industry Group

Investing in litigation finance: A growing alternative asset class

Litigation poses a unique challenge for insolvent, distressed or cash-poor claimants—but high-value claims can be among their most valuable assets. Legal finance allows stakeholders to pursue valuable claims that otherwise may have to be abandoned or settled—thus maximizing recoveries for debtors and for creditors. A legal finance provider can monetize claims for companies in reorganization, fund liquidations or litigation trusts, provide capital to law firms or insolvency practitioners to pursue matters taken on risk and finance inter-creditor disputes.

Litigation finance has become a common and integral aspect of discussions surrounding corporate restructuring. It enables the financing and monetization of litigation rights, treating them as valuable assets that can unlock the value of estate assets for creditors and shareholders. As a result, litigation finance deals are now recognized as a significant alternative investment asset class, offering relatively high and uncorrelated rates of returns. However, it is important to note that investing in legal finance carries its own set of risks.
Presentation provides an overview as well as a deeper dive into current trends and considerations in the litigation finance field, including different forms of funding, what funders look for when evaluating a case for investment and key consideration for those seeking funding. Business Suggested Speakers Christina Madden cmadden@burfordcapital.com Burford Capital

Unlocking incremental value in bankruptcy estates with legal finance

In 2024, as corporate bankruptcies surge in the US, an increasing number of companies are entering bankruptcy with existing litigation assets in addition to avoidance and other claims that arise post-filing. Debtors and creditors should not overlook a tool to generate incremental value for bankruptcy estates: Selling or substantially monetizing large litigations—valuable collateral that has historically been overlooked as a source of incremental value for a debtor.
In this session we will outline some real-life case studies which illustrate the value of legal finance for recovering value for bankruptcy estates.
MagCorp: A mining firm had been involved in a long-standing lawsuit against its former holding company, accusing them of driving them into bankruptcy. After winning a $213 million judgment, MagCorp's bankruptcy trustee faced a shortage of funds to continue pursuing the case. To address this cash flow issue, the trustee and their attorney organized a groundbreaking public auction to sell an interest in the right to receive litigation recoveries from the $213 million judgment on appeal. The sale, which amounted to $26.2 million, allowed the estate to liquidate a portion of its contingent asset, mitigate the risk of the appeal, and ensure a minimum recovery for MagCorp's creditors.
Maines: A large food service distributor filed for voluntary bankruptcy following increased business pressures due to Covid-19 restaurant closures and was acquired by another company. The main assets in the estate were a portfolio of various food antitrust claims that would be hard for the company to pursue due to a lack of personnel and time constraints. The appointed trustees were able to distribute the cash proceeds from the sale of the litigation assets directly to creditors—generating liquidity that they would otherwise not have been able to access and delivering an accelerated and guaranteed financial result ahead of case resolution.
Cox Operating LLC: The recent 363 auction process run by the debtor and its advisor Moelis & Company in the In re: MLCJR LLC Chapter 11 bankruptcy for MLCJR’s subsidiary Cox Operating LLC’s pre-filing litigation claim generated substantial incremental liquidity for the debtor from a litigation claim that in the past may have been overlooked as an independent source of value.
Making various parties of interests to a particular bankruptcy aware of their optionality around unlocking the value of litigation assets through monetization or sale of those assets. Other Suggested Speakers Christina Madden cmadden@burfordcapital.com Burford Capital

Disclosure: What are our obligations to disclose when we know?

The ethical issues involving Judge David Jones in Texas are in the news all over the world. What lessons to we learn? What obligations do professionals -- both practitioners and judges have to question "connections"? How do we protect our industry which is built on transparency, notice and fairness? What happens when we fail to protect it? Does the public shrug their shoulders and figure that none of it is fair and only the powerful benefit? The mistrust hurts us all and especially in a court system that sees more businesses and individuals than any other. Are we destroying ourselves by regarding this as more of a game and forgetting that this is a profession that is built on trust? What should professionals and judges consider for disclosure of "connections"?
How do we determine what should be disclosed?
How do we live within our ethical obligations while providing the best representation of our clients? Business Suggested Speakers Deborah Thorne deborah_thorne@ilnb.uscourts.gov United States Bankruptcy Court NDIL

Are you leaving money on the table? The intuition behind the many practical applications of option theory.

Lenders face a fundamental problem in life: the math, from the onset, favors the borrower. This is nowhere better displayed than in real estate transactions, where most debt is non-recourse and secured at the property level. Much legal work in a real estate transaction can be viewed as an effort to make up for and possibly invert the inherent disadvantages of the lender. This session aims to provide an intuitive, practical understanding of the role of option theory in structuring and valuing the positions of borrowers and lenders. Be able to look at any situation and better assess the value of embedded optionality. See value or costs where you didn't see them before. Capture more value for your clients. Be able to draw option diagrams on cocktail napkins at networking events. Debtor Suggested Speakers Ken Miller kmiller@advisorsguardian.com Guardian Advisors

Evidentiary Rules, Objections & Procedures "Tune Up" In Bankruptcy Proceedings

For many practitioners, courtroom matters often become more routine recitations of settlements or agreed isolated issues to be argued. Likely all practitioners would appreciate a "tune up" on getting through a hotly contested case. Topics might include: pretrial motions (when and how to make); discovery right/procedures/objections; review of burden of proof and burden shifting rules; advice on presenting evidence by witness & common objections; how to get "in the record" the evidence you need - appraisals, valuation, lien position, payments, etc; Expert witness rules. Other David Cox david@coxlawgroup.com Cox Law Group

Monetizing Formerly Contaminated Industrial Sites - "Brownfields" - Through Solar Development

Debtor estates and other distressed stakeholders can monetize formerly contaminated parcels which have no higher or better use than solar by leasing or selling those assets to specialized brownfields-to-solar developers. These niche developers can buy suitable parcels outright or offer twenty-year leases which can be transferred with the property. The Inflation Reduction Act and renewable energy-friendly states provide significant financial incentives which allow for generous lease rates. Bankruptcy trustees, debtor estates, creditors and other stakeholders have begun exploring this monetization strategy, which can be accomplished out of court, as long as the assets are at least partially remediated. What is the brownfields solar financial model, whether through lease or acquisition, and how much revenue would it generate in a sample project?
What types of real estate assets are suitable for solar siting (and no other, higher/better uses)?
What geographical locations/states provide the best financial incentives (tax incentives, rec programs, high power rates) to generate the highest lease rate or purchase price for a trustee, debtor estate or other stakeholder?
What are the relevant provisions of the Inflation Reduction Act?
What are some of the relevant provisions in states with favorable policies?
How can a trustee, debtor estate or other stakeholder mitigate the environmental risk associated with brownfields solar projects?
How can public sector creditors properly dispose of or monetize through lease brownfield properties where the property owner is missing or refuses to appear in court proceedings?
Can environmental liabilities be discharged under section 363 of the Bankruptcy Code? Is that necessary in the context of developing solar on brownfields? Debtor Suggested Speakers Christy Searl christy@acpowerllc.com AC Power LLC

Venue concerns

creation of special “Chapter 11 districts” and the Texas Two-Step Other Denise Barnett Denise_Barnett@tnwb.uscourts.gov United States Bankruptcy Judge Western District of Tennessee (Memphis)

3rd Party Releases

(regardless of what the Supreme Court concludes) Other Denise Barnett Denise_Barnett@tnwb.uscourts.gov United States Bankruptcy Judge Western District of Tennessee (Memphis)

Legislative updates

Legislative updates Other Denise Barnett Denise_Barnett@tnwb.uscourts.gov United States Bankruptcy Judge Western District of Tennessee (Memphis)