Can Deliver Without Bankruptcy
Sometimes events of default occur that motivate a bank to seek an exit of the credit, such as changes in upper management, litigation that distracts the business, assertion of lender liability claims, and material financial reporting issues—not to mention payment defaults. When events like these...
Communication Is a Key Part in Making Lenders Whole
Five minutes before midnight on September 19, 2021, Flexible Funding LLC and its subsidiary, InstaPay Flexible, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division. The next day, at 12:27 p.m., these debtors filed an emergency motion...
Normal Is Over: This Is the Age of Disruption
The world keeps getting more complex and harder to navigate. This—and the uncertainty it creates—is perhaps the defining characteristic of this age. One crisis leads to the next, as longer-term structural changes remake economies, societies, and day-to-day lives. The most proximate example is the...
The Right Time: From POR to Full Recovery & Equity
Banks’ special assets groups are getting busy. Considering continuing supply chain problems, inflation, rising interest rates, and low unemployment, borrowers are suffering. Lenders must ascertain which credits possess the characteristics necessary for financial recovery and which might follow Bed...
The Secret Sauce for Successful Bankruptcies Requires the Right Ingredients
Distressed companies often seem like a tale of two cities. On the one hand, there are those with good profit and loss (P&L) statements but bad balance sheets. On the other, there are companies with good balance sheets but bad P&Ls. The Penn Central bankruptcy was one of the largest and most...
Bank Uses State Receivership to Avoid Foreclosing on Problematic Apartment Building
Most lenders would prefer to avoid litigation in connection with foreclosing on income-producing property. Sometimes, however, it is the best approach when dealing with a litigious borrower and a troubled income-producing property that, if foreclosed upon, would require extensive renovation to...
Are Private Lenders Ready for a  Recession?
For those who survived the global financial crisis (GFC) in 2007 and 2008, the aftershock seemed inevitable—and indeed it was. The capital invested in the middle market by private equity firms is exemplary. In 2007 there were 6,374 private equity M&A deals closed, representing $650.9 million of...
Emerging Concerns on ‘Independent’ Bankruptcy Directors, Zone of Insolvency &  DIP/Stalking Horse Sales
This article reviews issues emerging on the “independent” bankruptcy director, explores recent zone of insolvency trends, and outlines contemporary developments around the DIP/stalking horse. Independent Bankruptcy Directors Professor Jared A. Ellias of Harvard Law School has spearheaded recent...
Subchapter V: The Case for Turnaround and Restructuring Trustees
Over the last two decades Chapter 11 cases have become increasingly complex, expensive, and time-consuming. As a result, small business Chapter 11 filings had become an increasingly less attractive option for reorganization. To change that, the Small Business Reorganization Act (SBRA) added...
Creditworthiness Is in the Eye of the Beholder
In Shakespeare’s Hamlet (Act 1, Scene 3), Polonius offers some frequently repeated advice: “Neither a borrower nor a lender be; For loan oft loses both itself and friend…” Polonius’ logic is that hitching debt onto personal relationships can cause resentment and, in case of default, cost a lender...