Prepackaged and Prenegotiated Chapter 11 Plans: Current Trends and Strategies

Description

Prenegotiating or prepackaging a plan before filing a bankruptcy petition can significantly reduce both the costs and risks associated with a traditional chapter 11 case. A prepack involves soliciting votes on a chapter 11 plan prior to filing the case. This not only requires debtors to carefully prepare and execute prepack strategies to avoid violating the Bankruptcy Code’s solicitation and confirmation requirements but it may also require considerable lead time.

Like pre-packs, prenegotiated plans reduce the cost and risks associated with the chapter 11 process by aligning key parties prior to the filing. They are a particularly useful tool when the debtor can obtain consensus among most, but not all, critical constituents. In this situation, debtors and their key constituents often enter into plan support or “lock up” agreements that are heavily negotiated and serve as the road map for the debtor’s ultimate plan.

Join us as our authoritative panel of restructuring attorneys delves into the benefits and risks surrounding prepackaged and prenegotiated plans and offers strategies for professionals who are using—or challenging—these arrangements. The panel will provide attendees with a brief overview of prepackaged and prenegotiated plans and their features and then focus on current trends and issues in today's environment, including the emerging use of “super speed” prepacks as well as recent trends and decisions regarding PSAs for prenegotiated plans that call for significant, and sometimes controversial, payments to be made to PSA parties and their professionals