Vermont State Approved Sessions

May a trustee make a distribution to a secured creditor that has not filed a proof of claim? Should trustees or debtors file surrogate claims if secured creditors have not? Does a debtor’s failure to make post‐petition payments to a creditor defeat the debtor’s eligibility for a discharge? This panel will address the emerging case law on whether direct post‐petition payments as required by the plan are considered “payments under the plan” as contemplated by § 1328(a), the growing complications that may arise from a secured creditor’s not filing proofs of claim, and the impact of proposed rule changes on these hot issues.

The trial team in this session will explore strategies to quickly discover essential facts relating to substantive and procedural legal defenses by discussing the use of discovery, the proper use of and best practices for motions for summary judgment and developing the summary judgment record, and strategies for opposing summary judgment in a contested matter to which Part VII of the Federal Rules of Bankruptcy Procedure apply. The context will be an objection to a proof of claim asserting legal defenses, including improper interest charges, based on a hypothetical case. The panelists will conduct several mock strategy sessions and a mock summary judgment hearing, and offer commentary from the trial team members.

Young lawyers frequently learn that they will be working on a new chapter 11 case when they are directed to start drafting pleadings. This session, spearheaded by members of ABI’s Young & New Members Committee, is geared toward gaining an understanding of what precedes that moment by (1) advising and educating the new(er) generation of bankruptcy professionals on the background and “big picture” of a chapter 11 case, and (2) advising and educating the newest generation of bankruptcy professionals on pre-filing strategies. The panel will explore and help identify operational, financing and litigation problems that may be faced by distressed companies, then will explore both short-term and longer-term strategies that can be pursued before a petition is filed.

IP Issues in Bankruptcy Deals

Using Available Technologies in Bankruptcy Litigation — From the Basics to the Cutting Edge

This is the second in a series of presentations geared toward understanding the deal-document side of a common transaction in a chapter 11 case. The panel will focus on DIP financing agreements, specifically what is behind the representations and warranties, covenants, default provisions and remedy provisions: Do differences exist if the DIP lender is the pre-petition lender rather than a new provider of funding? Are there deal-document differences if it is a syndicated lender group rather than a single lender? Just as important is what the panel will not focus on: This is not intended to be a discussion of § 364 and the means for obtaining approval of, or objecting to, a DIP financing motion. Rather, the presentation will be by those who understand and can explain the provisions of, the rationale behind, and the drafting and negotiation of the DIP financing agreement’s provisions.

The claims trading marketplace has been growing rapidly over the past several years and has become commonplace in most significant chapter 11 cases. Fueling this activity are private-equity and hedge funds with varying motives and interests. This panel will explore the types of trades taking place and the mechanics of claims trading, and examine the influence that hedge funds are having on chapter 11 practice, as well as their practical impact when this “new” constituent has a seat at the table.

Contested evidentiary hearings in chapter 11 confirmation battles have one near-constant attribute: They are expert witness-intensive undertakings. Whether relating to the value of a secured lender’s collateral, the appropriate discount rate to be applied in valuing a payment stream provided under a plan, compliance with the best-interests-of-creditors test, feasibility or any number of other potentially contested issues, presenting expert testimony is at least worth considering, if not required. Panelists will focus on the presentation of expert testimony in contested commercial chapter 11 cases, identify the issues that may require expert testimony, discuss how to locate an appropriate expert, and offer their views on how to prepare and present an expert though the discovery and trial stages. This will not be a presentation on the same old real estate appraisal evidence that most experienced practitioners can recite in their sleep (“I considered the income approach, the comparable-sale approach and the cost approach.” YAWN). Rather, the panel will focus on presenting, and cross-examining, the sorts of sophisticated financial experts that testify regarding the various elements of plan confirmation.

Even with the asbestos cases largely resolved, chapter 11 remains the preferred — if not the only — way for debtors to address mass tort liability. Chapter 11 cases involving mass torts typically present complex and interwoven issues of jurisdiction, claims determination, choice of law, insurance, liability of third parties, injunctive protection and the like. Using as examples pending chapter 11 cases in Massachusetts (New England Compounding Company, involving tainted drugs) and Maine (Montreal, Maine & Atlantic RR, involving a massive explosion), this panel will discuss the strategic and legal considerations facing debtors, trustees, injured claimants and other creditors as they work toward or against a successful chapter 11 case.

The opening line to any discussion about the current trends in chapter 11 cases is often, “Everything is a 363 sale.” Well, not everything: The other way that companies are seeking to minimize the risks of chapter 11 is through the prepack. This panel will discuss the mechanics of, and law behind, a prepackaged chapter 11 case, including plan-support agreements, restrictions on solicitation and how you comply with them, existing restrictions regarding those parties-in-interest that are negotiating the prepack once they start negotiations and receive non-public information, how you solicit votes pre-petition from those not directly involved in the prepack negotiations, and whether at the end of the day you can really bind anybody. The panel will also discuss the risks of overreaching in a plan-support agreement, including a discussion of the Innkeepers decision issued by the U.S. Bankruptcy Court for the Southern District of New York.