Chapter 11 Exit Strategies in the Frozen Credit Market

Evaluating the Alternatives When Bankruptcy Financing is in Jeopardy

Will cash-strapped lenders force more businesses to liquidate rather than reorganize?

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Thursday, January 15, 2009

Course Materials

This seminar will explain the impact of the credit market crunch on Chapter 11 exit financing, weigh the benefits and risks of reorganizing versus liquidating, and recommend strategies for bankrupt companies seeking exit financing.

Description

The credit market crisis makes it difficult for corporations under Chapter 11 protection to secure new financing or maintain previously committed funding to enable them to emerge from bankruptcy, forcing many companies into sudden liquidation.

As lenders continue to withdraw from financing commitments, bankruptcy counsel expect an increase in litigation between lenders and bankrupt corporations, particularly around material adverse change (MAC) clauses in loan agreements.

To avoid the possibility of losing bankruptcy funding during a protracted restructuring process, corporations are increasingly prenegotiating reorganization plans prior to filing for bankruptcy protection. Companies are also weighing the benefits and risks of restructuring versus liquidating.

Listen as our panel of bankruptcy attorneys explains the impact of the credit market crunch on Chapter 11 exit financing, weighs the benefits and risks of reorganizing versus liquidating, and recommends strategies for bankrupt companies seeking exit financing.

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Outline

  1. Current trends in bankruptcy exit financing
    1. Delphi Corporation
    2. Dura Automotive
    3. Solutia Incorporated
  2. Bankruptcy alternatives – pros and cons
    1. Reorganization
    2. Chapter 7 liquidation
    3. Section 363 sale
    4. Merger
  3. Future trends in bankruptcy exit financing and strategies for bankrupt corporations
    1. MAC clause litigation
    2. Pre-negotiated reorganization plans

Benefits

The panel will review these and other key questions:

  • How has the credit market crisis impacted distressed corporations' ability to secure financing needed to emerge from Chapter 11 bankruptcy protection?
  • What are the anticipated legal consequences of lenders' decisions to deny or withdraw previously committed exit financing?
  • How will the shortened time frames for reorganization mandated in the 2005 Bankruptcy Code Amendments impact corporations seeking financing while under Chapter 11 protection?
  • What are the legal alternatives — and associated strategies — for bankrupt companies currently under control of the bankruptcy court?

Faculty

Milione, Victor
Victor Milione
Partner
Nixon Peabody

He is Group Leader of the firm's Financial Restructuring and Bankruptcy Group with a practice in New...  |  Read More

Theresa V. Brown-Edwards
Theresa V. Brown-Edwards
Partner
Potter Anderson & Corroon

She is a partner in the Bankruptcy and Corporate Restructuring Group focusing on corporate reorganizations. She has...  |  Read More

Michael B. Solow
Michael B. Solow
Partner
Kaye Scholer

He has over 20 years experience representing creditors, trustees and governmental agencies and other parties nationwide...  |  Read More

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