The prevalence of liability management exercises (LMEs) continues to grow as companies seek creative solutions to manage unsustainable capital structures. Majority creditor groups have a long list of options to choose from in order to put themselves in front of minority creditors – priming, uptiering, covenant stripping, drop-down transactions and more. But the track record for so-called lender-on-lender violence has been patchy at best, often serving as a precursor to bankruptcy, rather than a way to avert it.
Potential discussion points:
1) What are some key takeaways from recent litigation, and what could have been done differently?
2) How can minority/nonparticipating lenders best protect themselves via creditor cooperation agreements?
3) What are the implications of these transactions on valuations?
4) How have these transactions evolved, and what does the future of lender-on-lender violence hold?
Attendees will gain an understanding of the current and future state of liability management exercises, including insights on litigation trends and updates on several recent key appeals.
Attendees will also learn about strategic approaches for creditors to effectively navigate these challenges and how lawyers can stay on top of these issues for their clients.
The session will provide projections for the distressed debt landscape in the upcoming year, equipping participants with knowledge to forecast opportunities that may arise.
Debtor
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
Session will identify options to bankruptcy for struggling companies and explain why certain alternatives should be considered and in certain instances utilized.
Many bankruptcy practioners are not familiar with non-bankruptcy options such as ABCs and UCC sales which in many instances are far superior to the bankruptcy option.
This session will educate the practitioner so that that individual can provide proper advice and representation for the struggling business client.
Business
Suggested Speakers
Bryan
Davidoff
bdavidoff@ggirm.com
Randy
Nussbaum
randy.nussbaum@sackstierney.com
Sacks Tierney Scottsdale
The session will review the big deals in distressed investing in 2024 and make some predictions about 2025.
I would envision 3 speakers addressing small, medium and large sized transactions. The panelists would include claims trader, real estate investor, and hard asset (private equity) investor. The moderator could be an attorney that services these constituencies.
The distressed investing world provides a significant amount of work for the legal community. I was instrumental in putting together a program for TMA NY that focused on the Private Credit Market which sold out.
Debtor
Joseph
Sarachek
joe@saracheklawfirm.com
Sarachek Law Firm
Double entry accounting and financial statement literacy, cash flow projections, monthly operating report basics - the new forms.
Tax issues.
Adult ADHD diagnoses - coping skills - (luncheon speaker?)
Substance abuse
Boycott Arizona until they change their 1800s laws regarding women's health. Go back to Terranea. I will not be attending.
Business
ELISA
SARTORI
esartori@greenridgeservices.com
Greenridge Financial Services LLC
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The Restructuring Reprieve Is Over for the Retail Sector
