This session will provide a comprehensive understanding of the Business Judgment Rule (BJR) as it applies to corporate governance, with a specific focus on how directors and officers can navigate potential litigation. The session will start with a foundational overview of the BJR, followed by an in-depth analysis of the key legal cases that have shaped its application. Additionally, the session will delve into the strategies for advising corporate clients—particularly directors and officers—on how to avoid becoming targets of litigation, including the role of independent board directors in mitigating risk.
Session Structure and Key Topics:
1. Introduction to the Business Judgment Rule (BJR)
Objective: Provide a foundational understanding of the BJR and its role in corporate governance.
- Definition of the BJR and its purpose in protecting directors and officers from liability.
--- The BJR presumption: when courts defer to the decisions of corporate leaders.
--- Key elements required to invoke the BJR: good faith, rationality, and lack of conflicts of interest.
--- Key areas where the BJR applies: financial decisions, strategic direction, and operational oversight.
2. Key Legal Cases Shaping the Business Judgment Rule
Objective: Explore the landmark cases that have defined and evolved the application of the BJR.
- Smith v. Van Gorkom (1985): The duty of care in decision-making and its relation to the BJR.
- Aronson v. Lewis (1984): The standard for judging board decisions and establishing the BJR presumption.
- In re Caremark International Inc. Derivative Litigation (1996): The BJR's application in oversight and monitoring duties.
- Stone v. Ritter (2006): Examining the role of good faith and the implications for directors' oversight responsibilities.
- Directors' duty of loyalty vs. duty of care: Understanding the balance and how courts distinguish between them.
3. Litigating Business Judgment: Defending and Pursuing Claims
Objective: Offer insight into the litigation landscape for D&O claims and how the BJR impacts defense and pursuit of litigation.
- Litigating under the BJR: When the rule can be overcome by plaintiffs and how courts assess the decision-making process of directors.
- Strategies for defending directors and officers in lawsuits, including the use of the BJR as a key defense.
- How plaintiffs attempt to overcome the BJR (e.g., allegations of bad faith, lack of independence, or conflicts of interest).
- Case studies and trends in shareholder derivative suits and class actions.
4. How to Advise Directors and Officers to Avoid Becoming Targets of Litigation
Objective: Discuss proactive strategies for corporate advisors to help directors and officers avoid litigation exposure.
- Best practices for documenting decisions to ensure alignment with the BJR.
- The importance of maintaining a robust conflict-of-interest policy and board independence.
- Key governance practices that mitigate risks: regular board evaluations, clear delegation of authority, and transparency in decision-making.
- Ensuring compliance with statutory and fiduciary duties—particularly in distressed situations.
- The role of internal and external advisors in helping directors navigate complex situations.
5. The Role of Independent Board Directors in Mitigating Risk
Objective: Highlight the importance of independent directors in protecting the organization and its leadership from litigation.
- Defining the role and responsibilities of independent board members.
- How independent directors help reinforce the BJR in decision-making processes.
- The critical role of independent directors in distressed or bankruptcy situations.
- Best practices for selecting, empowering, and working with independent board directors to safeguard against personal liability.
Target Audience:
General Business Bankruptcy Counsel | Corporate Governance Professionals | Directors and Officers (D&O) | Litigators specializing in corporate governance and D&O cases | Financial Advisors specializing in distressed situations and workouts | CROs
Learning Objectives:
- Gain a comprehensive understanding of the Business Judgment Rule and its importance in corporate governance.
- Analyze major legal cases and their impact on the application of the BJR.
- Develop strategies for defending and pursuing litigation involving directors and officers.
- Learn proactive strategies for advising directors and officers to minimize the risk of personal liability and litigation.
- Understand the importance of independent board directors in mitigating risks for directors and officers.
Business
Suggested Speakers
As rising interest rates, tightening credit conditions, and shifting market dynamics place increasing pressure on real estate assets, bankruptcy and restructuring professionals must be prepared to navigate distressed situations strategically. This session will explore the intersection of real estate, bankruptcy, and litigation, providing insights into effective legal strategies for preserving asset value, resolving disputes, and maximizing recoveries in real estate-related bankruptcies. Attendees will gain a deeper understanding of common distress triggers, key considerations for restructuring agreements, and best practices for handling litigation arising from distressed real estate investments. Experts will also discuss the role of receiverships, workouts, and court-supervised sales in resolving real estate bankruptcies.
Analyze Distress Triggers: Identify the key financial and legal factors leading to distress in real estate investments, including debt maturities, covenant breaches, and sponsor disputes.
Understand Restructuring Tools: Explore workout strategies, prepackaged bankruptcies, and other mechanisms for repositioning distressed real estate assets.
Evaluate Litigation Risks: Examine common legal disputes in real estate bankruptcies, including lender liability claims, fraudulent transfer litigation, and lease assumption/rejection battles.
Assess the Role of Receiverships and Sales: Learn how receiverships and 363 sales can be leveraged to maximize asset value and facilitate orderly dispositions.
Develop a Litigation-Resistant Investment Strategy: Gain insights into structuring real estate deals to mitigate risks and protect creditor and investor interests in downturns.
Business
Suggested Speakers
Leo
Jacobs
gaby@rarepublicrelations.com
Gaby
Suarez Walters
gaby@rarepublicrelations.com
R[AR]E Public Relations
Bankruptcy attorneys regularly use auctions to liquidate assets, but few understand the underlying principles that make auctions successful, fair, and efficient. This session, inspired by Auctions by Timothy P. Hubbard and Harry J. Paarsch, provides an accessible introduction to auction theory tailored to bankruptcy practitioners. Attendees will learn about key auction types, common bidding strategies, and potential pitfalls like collusion and the "winner's curse." With a focus on practical applications, this session equips attorneys to better structure auctions, choose the right formats for specific assets, and advocate for processes that maximize creditor recovery. Perfect for attorneys aiming to enhance their approach to bankruptcy auctions and secure optimal outcomes for clients.
By the end of this session, participants will be able to identify and differentiate between key auction formats used in bankruptcy contexts, understand fundamental bidding strategies and their impact on auction outcomes, and recognize common auction pitfalls, such as collusion and the winner’s curse. Attendees will gain practical insights into selecting auction structures that align with asset types and client goals, ensuring fairer and more effective liquidation processes. This knowledge will empower bankruptcy attorneys to enhance asset recovery efforts and better advocate for clients throughout the auction process.
Business
Suggested Speakers
Mike
Carey
mcarey@tranzon.com
Mike
Carey
mcarey@tranzon.com
Tranzon Auction Properties
This session will introduce participants to the very hiogh likelihood that digital assets could be a part of a bankruptcy estate given the rapid growth in the use of digital assets to transact business and in the number of people in the United States that own digital assets. Participants will be made aware of the resources, tools, and professional services available to locate, track, quantify, value and recover digital assets for the bankruptcy estate.
1. Participants will gain a working understanding of blockchain technology, cryptocurrencies and other digital assets and their rapid adoption by individuals and businesses.
2. Participants will learn to identify signs that a party may possess digital assets and will be familiar with the resources available to aid in discovering and identifying digital asset ownership.
3. Participants will learn about the techniques and tools available to trace and recover digital asset transactions.
4. Participants will learn the basic issues and challenges in valuing digital assets.
Creditor
Because bankruptcy attorneys are being asked to find non-bankruptcy solutions more and more, to avoid the expense of full-blown bankruptcy, I would love to develop competencies in areas just adjacent to our normal practice area.
Article 9 sales are one area that are so close. I would love to know more.
From understanding the goals of private equity/private finance to understanding the nuts and bolts of service requirements, potential litigation tactics that may come in to play after the fact with creditors, to traps for the unwary, I think there is a lot to cover here.
Business
Jennifer
McLemore
jmclemore@williamsmullen.com
Williams Mullen
With large cities contemplating or trying to create "reimagined downtowns" following drastic declines in commercial tenancies, and drastic increases in un-used or under-utilized downtown/urban buildings, property owners may need to adapt to potential re-uses of their commercial properties, which may or may not include Bankruptcy Court involvement by way of landlord and/or tenant bankruptcies. This panel will address the practical and legal aspects of "reimagined downtowns," including with predictions on what cities will try to do to reinvigorate their downtowns over the next few years.
Participates will understand how landlords, tenants, landlords' lenders, and cities view their respective strengths and weaknesses, and may be able to work together to achieve best outcomes, in the current situation affecting urban commercial properties.
Creditor
Suggested Speakers
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
Israel
Shaked
ishaked@michel-shaked.com
Ken
Miller
kmiller@advisorsguardian.com
Guardian Advisors
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
Real Estate Property taxes are often a major issue that drives a debtor into chapter 13 and perhaps 7. The various states and municipalities have may different ways to collect the taxes, including the opportunity to sell the taxes to a buyer who can ultimately obtain title to the property for payment of those taxes. This session would be a discussion of common issues faced by debtors, municipalities and courts around the country regarding the payment and collection of these taxes.
Attendees will understand the many ways that real estate property taxes are handled by municipalities and bankruptcy courts.
Attendees will understand the various procedural and legal issues that a debtor much be aware as they attempt to deal with these taxes in their Bankruptcy case.
Consumer
Janet
Baer
janet_baer@ilnb.uscourts.gov
US Bankruptcy Court, ND Il
