Business

Individual chapter 11 cases pose a number of thorny legal and practical problems for the bankruptcy practitioner. While individual chapter 11 cases contain many elements of corporate chapter 11 and chapter 13 cases, they do not fit comfortably in either chapter. Following the enactment of BAPCPA, courts have struggled to strike the appropriate balance between the provisions of the Bankruptcy Code intended for corporations and those intended for human beings. The result is substantial uncertainty for debtors and creditors alike. This session will explore: Does the absolute priority rule apply to individual chapter 11 debtors? May creditors commence an involuntary chapter 11 case against an individual? May individual chapter 11 debtors pay their living expenses in the ordinary course of business, or is notice and a hearing required? What are the advantages and disadvantages for debtors and creditors in an individual chapter 11 case as compared to a corporate chapter 11 case or a chapter 13 case?

When companies file Chapter 11, they communicate on a number of fronts and through a number of means. Pleadings are fashioned to convey a particular message to the court, creditors and anybody else who might read them. Public companies have certain mandatory disclosures in the form of 8Ks. More importantly, and more interestingly, communications strategies are undertaken by debtors to inform but reassure their customers, vendors and the public. This program will be led by experts in the field of communications in the face of a bankruptcy. Issues include securities law compliance prepetition, avoiding improper plan solicitation, the role of communications professionals in messaging even in filed documents and in case proceedings, such as the first day declaration and at the 341 meeting and, post-petition when court approval is necessary or advisable.

This program will focus on the legal and business challenges that faced counsel to a debtor, secured lenders and franchisor in a hotly litigated, modest-sized Chapter 11 in Massachusetts involving a two-tiered ownership of six Planet Fitness franchisees. Filed in 2010 and ending with a confirmed plan in 2012, the case involved shifting allegiances, successive plans, alternative considerations of an asset sale vs a change in equity ownership depending on litigation with the franchisor, and a plethora of challenging issues, including (i) the contested settlement of litigation challenges to one secured creditor, (ii) the potential cram-down of a second secured creditor, (iii) the treatment of leases intended as security, (iv) disputed feasibility, (v) the ability to assume (and assign) the franchise agreements, (vi) whether the franchisor’s right of first refusal was enforceable, (vii) whether de-branding is a real alternative to a continuation of the franchise, (viii) whether the franchisor’s rights were waived during the case, and (ix) claims estimation. See In re Chicago Investments, LLC, 470 B.R. 32 (Bankr. D. Mass. 2012).

The challenges and difficulties of avoiding leveraged buyout transactions, covering emerging law involving LBOs including application of the § 546(e) safe harbor and collapsing such undertakings.

The absolute priority rule: trials and tribulations of new value. Cram down issues with 1111(b)(2) and Pacific Lumber. Practical considerations when litigating non-debtor releases.

Discussion of trends and forecasts in energy industry; introduction to the fundamentals of oil and gas investing and relevant legal/business issues

Selection of CRO and establishment of a scope and chain of command; role of CRO and other officers in intercompany disputes in multi-debtor cases; negotiating pre- and post-confirmation equity/incentives for officers and directors; selecting a post-confirmation board of directors; issues and actions constituting “cause” for appointment of trustee or examiner motion; appointment and role of examiner in recent cases (Rescap, Dewey, Dynegy)

Past valuation panels have focused on the three traditional methods for determining the enterprise value of an operating business: DCF, comparable company and comparable transaction. This panel will focus on sources of value or reductions in value that are sometimes disregarded, such as excess cash and working capital, underutilized real estate and hard assets, claims and other contingent assets, insurance claims, intellectual property portfolios, discontinued businesses and NOLs. Normalizing adjustments are also discussed, including those related to above-market compensation, insider contracts, and underinvestment in capital plan and brand equity