Review considerations for designing your classes of claims under a plan when you seek to have all impaired classes accepting the plan. Dealing with government creditor claimants (not inclined to vote). Dealing with other "national" creditors on small cases (where creditor counsel may not be involved). Strategies for encouraging voting and/or dealmaking. Understanding impairment (and when votes are not required). What is a "prompt" cure for purposes of impairment. Risks of artificial impairment. Getting to consent. A review of all of the creative chips that can be traded back-and-forth between creditors and debtor's counsel to negotiate consensual plan.
Business
David
Cox
david@coxlawgroup.com
Cox Law Group, PLLC
Discussion of the compelling reasons why Bankruptcy Rule 9031 should be repealed or amended to allow for the appointment of special masters in bankruptcy cases and proceedings.
Debtor
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
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
The session will introduce commercial bankruptcy practitioners to creative solutions in confirming plans that seems unconfirmable under § 1129(a)(10). To achieve this goal, the audience will be introduced to the issues surrounding artificial impairment, no voting classes, and insiders strategically abstaining from voting. The audience will then be introduced to the toolbox of section 1191(b) alternative cramdown solutions, which the panelists will explain are surprisingly within the reach of a subgroup of cases until now considered complex.
Participants will learn how to recognize scenarios that lend themselves to alternative solutions to confirm nonconsensual plans. Participants will also learn about the advantages and limitations of the use of subchapter V of chapter 11 in what are traditionally considered complex cases.
Business
After the Supreme Court's reversal in Purdue, Debtors subject to mass tort liability will not be able to reorganize utilizing third party releases under a plan. Prior to Purdue, the Fifth, Ninth, and Tenth Circuits all prohibited third party releases but debtor subject to mass tort liability have nonetheless been able to reorganize. How did those debtors confirm their plans without third party releases? How will mass tort reorganization different after Purdue?
Business
Suggested Speakers
Ilan
Scharf
ischarf@pszjlaw.com
Tanc
Schiavoni
tschiavoni@omm.com
John
Lucas
jlucas@pszjlaw.com
Pachulski Stang Ziehl & Jones LLP
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
Creditors often feel they have little to no leverage in Subchapter V cases. But is that necessarily the case? This panel would focus on strategies for approaching Subchapter V cases from a creditor's prospective.
The session would give lawyers tools for counseling their clients through Subchapter V, particularly given most creditors' lawyers feel there are little to no options.
Creditor
Timothy
Anzenberger
tim.anzenberger@arlaw.com
Adams and Reese LLP
