DIP Financing: Emerging Legal Strategies for Debtors and Lenders

Evaluating Options When Chapter 11 Financing is Scarce

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


Conducted on Thursday, October 22, 2009

Recorded event now available

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Program Materials

This seminar will discuss recent developments and trends in Chapter 11 bankruptcy financing, the impact for debtor companies and lenders, and best practices for debtors and lenders in weighing their bankruptcy options.

Description

The tight credit market has severely constricted debtor-in-possession (DIP) financing, causing many companies to reevaluate reorganization strategies under Chapter 11. In lieu of traditional bankruptcy financing, several alternative financing strategies are emerging.

Private equity and hedge funds are new players in the financing arena who are trading in their investments for DIP loans in "loan-to-own" strategies. Existing lenders with jeopardized loans are making defensive DIP loans to protect existing investments.

The cost of bankruptcy financing remains high enough that companies need to weigh liquidation, asset sale, and reorganization options. The 2005 Bankruptcy Code amendments shortened the time for reorganization, complicating options even more. The credit pressures are producing more pre-pack filings.

Listen as our authoritative panel of bankruptcy attorneys discusses the current trends in bankruptcy financing and the impact on strategies for debtors and lenders.

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Outline

  1. Current trends in bankruptcy financing
  2. Bankruptcy alternatives—pros and cons
    1. Reorganization
    2. Chapter 7 liquidation
    3. Section 363 sale
    4. Merger
  3. Emerging bankruptcy strategies
    1. Pre-negotiated reorganization plans
    2. Loan to own
    3. Bankruptcy roll-ups

Benefits

The panel will review these and other key questions:

  • What DIP financing trends are emerging—and how have new, more onerous terms of DIP loans affected bankruptcy strategies?
  • What effect have loan-to-own strategies had on the bankruptcy process?
  • How can prenegotiated bankruptcies help debtors and lenders?

Faculty

D. Tyler Nurnberg
D. Tyler Nurnberg

Partner
Kaye Scholer

He represents banks, institutional investors and troubled companies in workouts and reorganizations throughout the...  |  Read More

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

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