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Key Considerations Through a Portfolio Company's Life Cycle

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Guest Editor

The first half of 2017 has proven to be a very busy time for the turnaround industry. We’re pleased to bring you a tremendous issue of the JCR, focused on private equity, with thoughtful perspectives on key considerations throughout a portfolio company’s life cycle. There are interesting articles for board members who may be nearing the zone of insolvency and considerations for portfolio managers on the front or back end of transactions.

Private equity aside, we also have some great pieces on recent U.S. Supreme Court rulings on structured dismissals, and special intercontinental collaboration between some of the top academic minds in the turnaround space. We hope you enjoy this issue as much as we did in putting it together.

We start with two of the world’s foremost bankruptcy academics. Professors Edward I. Altman of New York University’s Stern School of Business and Robert Benhenni from the Pôle Universitaire Léonard de Vinci in Paris and Resident Scholar at the NYU Salomon Center team up for an international perspective on “The Anatomy of Investing in Defaulted Bonds & Loans.”

Oscar Pinkas, Bryan Bates, and Sarah Schrag of Dentons dissect the Supreme Court’s recent ruling in Czyzewski v. Jevic Holding Corp., which effectively closed the “backdoor” on using structured dismissals to circumvent the absolute priority rule.

Mark Veldon, Glen Fietta, and Neil McFerran of AlixPartners highlight how impactful a restructuring focus can be for private equity firms if they use their post-merger integration process to formalize and begin executing on a value creation plan. Also on the front end of transactions, Patrick Chylinski and John Tira of RSM walk through some important considerations for private equity firms in a piece on common pitfalls that can lead to post-acquisition disputes.

Erik Weinick of Otterbourg brings forward topical cybersecurity and privacy concerns for private equity and restructuring professionals. Material obligations can quickly arise if “personally identifiable information” is not appropriately protected. Christopher Donoho and Christopher Bryant of Hogan Lovells highlight some best practices for board members of distressed portfolio companies, including how to tactically think about their duty of loyalty and duty of care as a company approaches the zone of insolvency.

Finally, Justin Alberto, and Sara Bussiere of Bayard explore advantages of various dissolution methods as a cost-effective alternative to Chapter 11 for private equity firms, a key consideration for firms that want to be both thoughtful fiduciaries and mindful of their firms’ capital. 

Spencer Ware

Spencer Ware, CTP

AlixPartners

Spencer Ware, CTP,  is a director in AlixPartners’ Turnaround & Restructuring Services group and is based in the firm’s New York office. He has more than 15 years of experience advising clients on complex financial and operational restructuring matters. Ware is an active member of TMA and was named Future Leader of the Year by the New York Institute of Credit. He can be reached at sware@alixpartners.com or 201-232-3970. 

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