Asset Sales

Asset Sales/Secured Credit Committees: This panel will debate the controversial proposal being considered by the ABI Commission to Study the Reform of Chapter 11 to assess a charge or hold-back on secured lenders for a § 363 asset sale, including the pros and cons, mechanics, application in various circumstances, consequences and policy issues.

Ethics & Professional Compensation/Real Estate Committees: This panel will explore various ethical issues that often arise in a single asset real estate bankruptcy case from the perspectives of the debtor, secured creditor and bankruptcy judge — via an entertaining and interactive fictional case study.

This nuts-and-bolts panel will cover the mechanics of § 363 sales, featuring discussions on pros and cons, current trends and recent cases, with a particular focus on credit-bidding (Fisker, Philly News and Free Lance-Star) and challenges to free-and-clear-sales (GM, Chrysler, Energytec).

Do new opnions suggest doubt about the right of a lender to bid the full value of claims in Chapter 11?

Selling financially distressed hospitals, nursing homes, senior living centers and other health care providers, including acute care hospitals, critical-access hospitals and continuing care retirement centers, presents many unique challenges not found in most “typical” bankruptcy cases. Identifying these important differences, and executing plans to deal with them, can make the difference between preserving the enterprise and being forced to liquidate. Legal, financial, political and regulatory traps abound. This panel will provide an overview of these considerations and highlight how to address these matters in relation to their particular significance within the Midwest region.

Section 363 sales are frequently invoked in an effort to render the debt side of a balance sheet irrelevant. Buyers and sellers generally spend much of their time negotiating pre-sale issues, such as bidding procedures, “break-up fees” and other bidding protections, perhaps relying on the “free and clear” language of § 363(f) to absolve the buyer of any liabilities associated with the assets. Buyers at § 363 sales typically assume that they take the assets free and clear of all liens and claims. Lending credence to the old adage “caveat emptor,” this program will focus on the issues that may prevent assets sold under § 363 from being cleansed of all liens, claims and interests, and will examine the limits of “free and clear” sales under § 363 of the Bankruptcy Code. The panel will identify those claims that may come back and haunt a buyer, no matter what a § 363 sale order provides, paying particular attention to cases where holders of claims that were unknown or perhaps unknowable at the time of a sale come in post-closing and successfully assert liability against a purchaser.

Find out the latest happenings in all of the Southern Districts. What can impact your practice? What should?

Potential buyers often have significant leverage over distressed sellers of assets and are able to influence or dictate the nature of the sale process. This panel will examine the considerations that a potential buyer of a distressed company should make when it has the opportunity to choose the appropriate process and venue for pursuing such acquisition. We will outline the pros and cons of Article 9 sales (both public and private), receivership sales, § 363 sales and “loan to own” strategies, including with respect to issues related to successor liability, funding considerations, operational concerns, timing, legal risk and deal certainty.