Distressed Vendors: Legal Implications for Business Partners

Assessing and Exercising Contractual Rights and UCC Remedies

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


Conducted on Wednesday, May 20, 2009

Program Materials

This seminar will discuss pre-bankruptcy strategies for sellers and buyers of commercial goods when a vendor is in economic distress. The panel will review rights and remedies available under supply or purchase agreements and applicable UCC law and the potential impact of the Bankruptcy Code on workout agreements.

Description

Commercial suppliers and buyers face the increasing prospect of financially distressed vendors. As the economic crisis continues to deepen, the strain weighs heavily on the supply chains in many industries.

Sellers must proactively protect their interests before a buyers' default or bankruptcy by first assessing contractual rights and rights under the UCC. Next steps include renegotiating supply contracts, negotiating security agreements, and obtaining third-party credit support for better protection.

Buyers have similar challenges in restructuring purchase agreements with suppliers. Guaranties, performance bonds and credit insurance may protect against seller default. All default workouts must be structured to survive the avoidance and preferential transfer provisions of the bankruptcy code.

Listen as our panel of attorneys discusses best practices for buyers and sellers of commercial goods to protect their interests when dealing with a distressed vendor and the potential impact of the Bankruptcy Code on workout agreements reached with vendors.

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Outline

  1. Protecting sellers facing a distressed buyer
    1. Early warning signs vendor is in distress
    2. Assessing contractual rights
    3. Available remedies under the UCC
    4. Best practices for pre-bankruptcy workouts
  2. Protecting buyers facing a distressed seller
    1. Early warning signs vendor is in distress
    2. Assessing contractual rights
    3. Available Remedies Under the UCC
    4. Best practices for pre-bankruptcy workouts
  3. Implications of bankruptcy code on vendor workouts
    1. Avoidance
    2. Preferential transfer
    3. Fraudulent conveyance

Benefits

The panel will review these and other key questions:

  • What are some of the early warning signs that your vendor is in financial distress?
  • What remedies are available under the UCC for sellers dealing with a distressed buyer?
  • How can guaranties, performance bonds and credit insurance protect a buyer facing a distressed seller?
  • What are best practices for drafting and amending purchase and sales agreements to avoid lawsuits for preferential payments or fraudulent transfers?

Faculty

Timothy W. Brink
Timothy W. Brink

Partner
DLA Piper

He focuses his practice on bankruptcy, restructuring, insolvency, and creditors’ rights matters. He regularly...  |  Read More

Eric S. Prezant
Eric S. Prezant

Partner
Bryan Cave

He has experience representing a wide range of clients nationwide including secured lenders, trustees, debtors,...  |  Read More

Michael J. Viscount
Michael J. Viscount

Partner
Fox Rothschild

He has extensive experience representing public and private businesses and creditors’ groups on corporate debt...  |  Read More

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