Restructure This! Episode 10: Challenges Facing Secured Creditors in Asset Sales
Sheppard Mullin’s Restructure THIS! features a panel discussion held live April 29th at the American Bankruptcy Institute’s Annual Spring Meeting in Washington, D.C. and moderated by Justin Bernbrock. Guests Matthew Guill of Configure Partners, Maja Zerjal Fink of Arnold & Porter and Jeffery Dutson of King & Spalding discuss the challenges that secured creditors now face in bankruptcy asset sales, including imperfect information and potential caps to credit bidding post-Fisker. They also explore ways that a secured lender can maximize optionality in a sale process, the procedural or regulatory pitfalls that secured lenders may face post-filing, and how to placate other parties in the capital stack (e.g., an unsecured creditors’ committee) that oppose a proposed asset sale.
As a Director with Configure Partners, Matt has advised companies, lenders, sponsors, and governments on an array of complex financing and restructuring issues, M&A activity, and general strategic advisory assignments. Matt came to Configure Partners from Greenhill & Co.'s Financing Advisory and Restructuring practice, where he most recently served as a Principal.
Maja Zerjal Fink
As a Partner at Arnold & Porter in New York City, Maja presents clients in distressed situations, corporate reorganizations, distressed investment litigation, and insolvency proceedings in the United States and across the globe. She has represented clients in numerous high-profile restructurings and some of the nation’s largest reorganization, including restructuring Puerto Rico's outstanding debt load of more than $74 billion.
As a Partner in King & Spalding's Leveraged Finance and Restructuring Group, Jeff represents banks and other investors in connection with their most complex financings, restructurings, and bankruptcy matters. He also frequently represents corporate debtors in Chapter 11 bankruptcy cases throughout the country, as well as buyers and sellers in distressed M&A transactions.
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What We Discussed in This Episode:
- What strategies can be employed when a client isn't willing to be flexible?
- What risks are inherent when a client is willing to be flexible?
- What hurdles need to be overcome when advising a secured lender group?
- Are any overriding themes applicable no matter where the lender sits?
- What are some pre-petition debt-acquisition themes related to opportunity?
- How are clients typically advised when a sales process is on the horizon?
- When is it time to push for a sale?
- If it's apparent that Chapter 11 will be necessary, is it wise to begin the filing process first? Or does it make more sense to commence the sales process pre-petition?
- What strategies might a lender employ in a consensual vs. non-consensual sales situation?
- Is representation & warranty insurance necessary?
- What is credit bidding?
- How can a credit bid be leveraged, either as a strategy or a defense?
- Can there be a fair process that permits a committee to test liens while at the same time promoting the sale of a going concern?
- What are the pros and cons of a stand-alone sale vs. a planned sale?
- What are some considerations for lender groups that will own an asset on the back-end?
- Is collusion really that big of an issue?
This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.