Section 363 Bankruptcy Sales: Credit Bids and Distressed Asset Transactions
Legal Strategies for Buyers and Lenders
Recording of a 90-minute CLE webinar with Q&A
Conducted on Tuesday, May 12, 2009
Recorded event now available
This seminar will review the Section 363 bankruptcy sale process, the expanding use of credit bids by investors in distressed debt, the implications of the Clear Channel case on credit bids, and offer best practices for buyers and secured creditors involved in Section 363 sales.
Description
Increasingly, bankruptcy has become a vehicle for sale rather than reorganization. Large shortfalls between secured debt and market value of collateral, and a dearth of buyers with cash or financing to bid, make it more common for secured creditors to successfully credit bid on their collateral.
An emerging strategy of investors is “loan to own” whereby an investor buys the debt of a distressed business at a steep discount, and once the company is in bankruptcy, makes a credit bid at auction for the face amount of the debt, and converts it to a controlling equity position.
The bankruptcy code generally favors secured creditors, but there are viable means for other creditors to challenge credit bids. Moreover, Clear Channel calls into question the prevailing assumption that a secured creditor's successful credit bid qualifies as a "free and clear" sale.
Listen as our panel of bankruptcy attorneys discusses the bankruptcy sales process, the varying strategies for secured creditors in submitting credit bids, and best practices for making and overcoming challenges to credit bids.
Outline
- Asset sales generally
- Standards for approval under Section 363
- Sale procedures
- Use of professionals
- Due diligence
- Stalking horse bidders
- Auction process
- Sale order
- Credit bids generally
- Secured status
- Claim amount
- Bid amount
- Consent requirements in multi-lender financings
- Ownership structure and governance
- Additional financing
- Challenges to credit bidder’s standing
- Recharacterization of debt
- Good faith
- Equitable subordination
- Secured creditor issues
- Defending a loan to own strategy
- Credit bids after Clear Channel
- Asset sales as part of a plan of reorganization
Benefits
The panel will review these and other key questions:
- How can unsecured creditors mount an effective challenge to a secured lender's credit bid?
- How can a secured creditor defend its loan-to-own strategy against credit bid challenges?
- What is the impact of the Clear Channel Outdoor Inc. v. Knupfer decision on credit bids and buyers in bankruptcy sales?
Faculty
Thomas M. Horan, Member
Womble Carlyle,
Wilmington, Del.
He focuses his practice on bankruptcy and creditors rights matters and is experienced in representing a broad range of entities in complex commercial bankruptcy cases including debtors, committees, debtor-in-possession lenders, secured and unsecured creditors, trustees, landlords, lessors, insurers and parties purchasing assets. He regularly defends preference and fraudulent transfer actions.
Derek M. Stoldt, Partner
Kaye Scholer,
New York
He focuses his practice on mergers and acquisitions, public and private securities offerings, joint ventures and licensing arrangements. His clients include financial sponsors, such as private equity, hedge and venture capital funds, as well as public and private companies in a range of industries.
Michael B. Solow, Partner
Kaye Scholer,
Chicago
He has over 20 years experience representing creditors, trustees and governmental agencies and other parties nationwide in the bankruptcy and insolvency area. He is Co-Chair of the firm's Business Reorganization and Creditors' Rights Department and is a frequent lecturer on various topics relating to dealing with insolvent entities.
Recordings
CLE On-Demand - Streaming Audio
Includes recorded streaming audio of full program plus PDF handouts.
On-demand is the only recorded format recognized for CLE credits in DE, IN, KS, LA, MS, NC, OH, OK, SC, TN, VA, WI.
AK, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN*, KS, KY, LA, ME, MN, MO, MT, NC, ND, NH**, NJ, NM, NV, NY, OH*, OK, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)
*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.
**NH attendees must self-determine if a program is eligible for credit and self-report their attendance.
CLE On-Demand Audio $297.00
Recorded Event
Includes full event recording plus handouts.
Strafford is an approved provider and self-study CLE credit is available in most states.
AK, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, KY, ME, MN, MO, MT, ND, NJ, NM, NY, OR, PA, TN, TX, UT, VT, WA, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)
Strafford will process CLE credit for one person on each recording.
Additional copies of a recording can be purchased at a discount. Please call Strafford Customer Service toll-free at 1-800-926-7926 ext 10 or email customerservice@straffordpub.com to place your order.
Recorded Audio Download (MP3) $297.00
CLE Credits
Many states grant CLE credits for on-demand streaming audio programs and recorded events. Our programs are pre-approved in many states. Refer to our state CLE map for state-specific information.
Customer Reviews
The program got right to the substance and did not spend lots of time on background/basics, providing a very sophisticated treatment of the issues.
John Hall
Lewis Rice
I thought the speakers were very well versed.
Richard A. Graham
White & Case
The webinar was informative on the current issues.
Lauren Bernstein
Kaye Scholer
I thought the program was excellent.
Michelle Rice
Arkin Kaplan Rice
I felt the program topic was well presented within the short time limit.
Kathy Pilkington
McGuireWoods
Bankruptcy Law Advisory Board
Adjunct Professor
Northeastern University
Partner
ForemanLaw
Matthew Gensburg
Shareholder
Greenberg Traurig
Partner
Dechert
Shareholder
Vedder Price
Partner
Nixon Peabody
Senior Consultant
JND Corporate Restructuring
Partner
Kaye Scholer
Counsel
Skadden Arps Slate Meagher & Flom
Our Guarantee
Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.