Evaluating Bankruptcy, Receivership, and Assignment For the Benefit of Creditor Alternatives to Protect Lender, Buyer and Borrower Interests

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


Conducted on Wednesday, May 19, 2021

Recorded event now available

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Program Materials

This CLE webinar will compare receiverships, ABCs, and bankruptcy, reviewing the advantages and disadvantages each offers to buyers, petitioning creditors, debtors, and non-petitioning creditors. The program will discuss what situations each process is best suited to address and key provisions to include in relevant orders and agreements. The panel will also address the Federal Priority Act and the receiver's duties.

Description

Lenders seeking quick and efficient remedies to protect their collateral may turn to receivership, which has become a common alternative to bankruptcy proceedings in recent years. Assignments for the benefit of creditors (ABC) is another option, often cheaper and faster than receiverships or bankruptcy. Although not sought as frequently, the appointment of a receiver to aid in collecting a judgment is a powerful tool. But there are drawbacks and risks for all parties to receiverships or ABCs not present in the bankruptcy process.

Sometimes borrowers complain of overreach by receivers and petitioning creditors, if not monitored. Buyers of assets or property may want assurances and title "free and clear" as only available in bankruptcy. Non-petitioning creditors often have divergent interests from those of senior lenders. Bankruptcy offers more transparency and the certainty of a court order, but sometimes with a higher cost. Much depends on the type of receiver appointed and the scope of powers and duties.

Listen as this panel discusses each process' benefits and drawbacks and the ease or difficulty of obtaining each remedy, relevant statutes, and best practices for all stakeholder constituencies.

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Outline

  1. Comparing bankruptcy, receivership, and ABC on key facets
    1. Relevant statutory authority
    2. How each process initiated
    3. Qualifications and duties of receiver, trustee, or assignee
    4. Compensation and use of professionals
    5. Oversight and accountability to court, others
    6. Stay of litigation or collection
    7. Claims and collateral disposition
    8. Priorities of payment and the Federal Priority Act
    9. Avoidance powers
  2. Best strategies
    1. Lenders
    2. Debtors
    3. Creditors

Benefits

The panel will review these and other key issues:

  • How are receiverships and ABCs being used?
  • What factors must be considered by lenders, borrowers, buyers and others when evaluating whether to seek or oppose a receivership or to use the ABC process?
  • What are the key provisions in any relevant receivership order or ABC?

Faculty

Bates, Bryan
Bryan E. Bates

Partner
Parker Hudson Rainer & Dobbs

Mr. Bates focuses his practice on business bankruptcy, creditors' rights, and commercial litigation. He represents...  |  Read More

Cohen, Theodore
Theodore A. Cohen

Special Counsel
Sheppard Mullin Richter & Hampton

Mr. Cohen specializes in creditors' rights and focuses on lender, indenture trustee, and lessor representation...  |  Read More

Johnson, Eric L.
Eric L. Johnson

Partner
Spencer Fane

Mr. Johnson represents clients in bankruptcy, non-bankruptcy insolvency proceedings, such as receiverships and...  |  Read More

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