Attention:

Corporate Governance in Distress Situations


Level: Advanced
Runtime: 71 minutes
Recorded Date: May 22, 2019
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Agenda


  • Related Party Transactions and the Standard of Review
  • Nine West Bankruptcy and Claims against Sponsor Sycamore Partners
  • RMH Franchise Holdings, Inc.
  • Potential Conflicts of Private Equity Representation
  • "Disinterested Lawyer" - Factors to Consider
  • Bankruptcy Requirements
  • Best Practices
Runtime: 1 hour and 11 minutes
Recorded: May 22, 2019

Description

This panel will discuss what strategies sponsors are using to retain control (or at least a stake) through the bankruptcy process, as well as the risks to sponsors, such as fiduciary duties; use of special committees as sword and shield; related-party transactions; sponsor affiliates purchasing debt in the portfolio company’s capital structure, as well as 10b-5 compliance; and selling or spinning off assets/business units (Caesars, Cengage, Nine West, PetSmart, Sears, Toys).

This program was recorded as part of ABI's New York City Bankruptcy Conference on May 22nd, 2019.

Provided By

American Bankruptcy Institute

Panelists

Richard L. Wynne

Partner
Hogan Lovells LLP

Richard Wynne has a national reputation for successfully representing company and creditor/bondholder clients in complex restructurings in a wide variety of industries. He focuses on solving clients' most challenging problems by designing and implementing negotiations and litigation strategy, and serving as lead trial counsel.

Richard's results-oriented approach was noted in Chambers 2017: "It was hard to see a goal line rather than a direction; being able to maneuver through that complex process was one of the skills few lawyers have, and Rick is on that short list."

Richard's recent engagements include Mattel, Inc. as the largest creditor and Creditors Committee Co-Chair in the Toys R Us Chapter 11 case; Synopsys, plan co-proponent in the ATopTech chapter 11 case; acting as lead debtor's counsel for Achaogen, Inc., All American Oil & Gas, Inc., American Apparel and Relativity Media, LLC; representing FGIC, leading creditor and Creditors' Committee Chair in ResCap; the Ad Hoc Bondholders Committee in Chemtura; the Non-Agent Secured Lenders Committee in Adelphia; and Universal and Fox in the Rhythm & Hues case.

In a decisive recent victory, federal bankruptcy Judge Wiles ordered Netflix to pay Relativity Media all its US$800,000 in attorney fees. Netflix argued that "Relativity should not be allowed to recover the cost of a Cadillac (or a Ferrari) if a Honda Civic would have done the job." Judge Wiles responded: "A complicated, fast-paced 'bet the company' litigation requires counsel of higher caliber and expense than a routine case with little at stake. A party may not need a Ferrari to go to the corner grocery store, but winning a Grand Prix race is a different matter."

Arthur J. Steinberg

Partner
King & Spalding LLP

Arthur Steinberg is a knowledgeable, experienced restructuring lawyer who knows when to litigate and when to cut the deal. With more than 38 years of restructuring experience, Arthur has represented all facets of a workout/bankruptcy including representing the debtor, secured and unsecured creditors, official and ad-hoc committees, distressed investors, asset buyers, equity holders, trustees, examiners and parties in bankruptcy-related litigation. He has also been a Receiver and Investment Company Act Trustee for failed hedge funds and investment advisors, and a court-appointed mediator.

Arthur has had a significant role in many of the largest bankruptcy cases including Payless Shoes, General Motors, Lehman Brothers, Washington Mutual, WorldCom and Enron.

A frequent author and speaker on bankruptcy and related topics, Arthur has been ranked repeatedly by Chambers USA, Best Lawyers in America, Legal 500 and Super Lawyers.

Nicole L. Greenblatt, P.C.

Partner
Kirkland & Ellis, LLP

Nicole Greenblatt represents debtors, creditors, equity holders and investors in all aspects of complex corporate restructurings, including Chapter 11 cases, out-of-court restructurings and special situation investments or acquisitions. Nicole has a broad range of experience across a number of industries and has represented clients in multi-jurisdictional and cross-border matters.

Described by clients as an “an exceptional attorney,” Nicole has been listed as a leading lawyer by Chambers USA in each of its 2014-2019 editions. In the 2019 edition, sources praised Nicole for being “very strong” and “very thoughtful,” adding that she “gets along really well with her clients.” Sources previously noted that Nicole “is effective at managing large cases,” has a “very practical way of looking at things,” is an “intelligent and effective practitioner” who is “passionate, smart, with the right balance of aggression and consensual deal-making ability” and “incredibly straightforward and very responsive.”

Nicole was also recognized in the 2017 and 2018 editions of The Legal 500 U.S., as a notable member of “one of the most pre-eminent law firms for US restructuring.” Nicole was recently nominated by the International Financial Law Review for the Euromoney Legal Media Group Americas Women in Business Law Award.

In 2018, Nicole was profiled in Crain’s New York inaugural list of the Best Women Attorneys in NYC. Law360 selected Nicole as its “MVP of the Year” for Bankruptcy in 2017. In 2016, Nicole was selected as an “Outstanding Young Restructuring Lawyer” by Turnarounds & Workouts, one of 12 individuals selected under the age of 40 for accomplishments in corporate restructuring. She was also selected by Law360 as one of nine Bankruptcy “Rising Stars for 2015” in its list of top attorneys under 40. In May 2014, the New York Times Magazine recognized Nicole as one of the New York metro area’s Outstanding Young Women Lawyers. In 2018, the Turnaround Management Association recognized the successful restructuring of Caesars Operating Entertainment Co. Inc. with its “Mega Company Turnaround of the Year Award.” Nicole’s work for an ad hoc committee of noteholders in connection with the restructuring of Arcapita Bank was recognized by The American Lawyer as the 2014 Global Finance Deal of the Year: Restructuring and Insolvency (Middle East). The Chapter 11 cases of The Reader’s Digest Association, Inc. and Tronox Incorporated, where Nicole acted as one of the lead restructuring partners, were both selected by Turnarounds & Workouts as two of the top ten “Successful Restructurings of 2010.” The Reader’s Digest was also recognized by the Global M&A Network as “Large Pre-Packaged Reorganization of the Year” at their Turnaround Atlas Awards in 2011. In 2011, Nicole was also selected as one of the top thirty nominees nationwide to participate in the inaugural Next Generation Program at the National Conference of Bankruptcy Judges, designed to attract up-and-coming bankruptcy attorneys who will become the leaders of the next generation of practitioners.

Mark P. Kronfeld

Managing Director
BlackRock

Mark Kronfeld is a Managing Director at BlackRock, where he focuses on special situations and distressed investments as well as private credit, rescue financing, and litigation finance. He manages the special situations strategy within the U.S. Private Credit Group and leads workouts and restructurings across the platform. Mark also serves on BlackRock’s Global Credit Oversight Committee.

Mark has over 24 years’ experience with a strong record of success in special situations, distressed, and event-driven investing across the capital structure in both public and private markets. He is a highly regarded restructuring and workout expert and a frequent lecturer, panelist, author and guest speaker on distressed investing and bankruptcy topics. Prior to joining BlackRock as part of its acquisition of Tennenbaum Capital Partners (TCP), he was a managing director at TCP and a partner/portfolio manager at Plymouth Lane Capital where he launched and led the firm’s distressed strategy.

Before Plymouth Lane, Mark was a managing director at BlueMountain Capital and a partner at Owl Creek Asset Management. Before his career in finance, Mark was a bankruptcy lawyer and a litigator. He also served as a prosecutor in NYC, where he handled cases involving fraud, organized crime, arson and murder, achieving a 100% jury trial conviction rate.

Mark is an adjunct professor at Boston University School of Law, where he teaches Financial Restructuring. He also teaches advanced distressed investing at Columbia Business School and guest lectures at NYU, Wharton, Duke, Yale, UVA and Oxford. Mark is a member of the American Bankruptcy Institute and ABI’s advisory committee for the Commission to Study the Reform of Ch. 11. He also served on the board of directors of Reorg Research.

Mark earned his MBA in Finance from NYU and his JD from Boston University School of Law where he was an Edward F. Hennessey Scholar. Mark received his BA from University at Albany where he was on the Dean’s List.

Shelley C. Chapman

Judge
U.S. Bankruptcy Court (S.D.N.Y.)

Shelley C. Chapman is a federal bankruptcy judge for the Southern District of New York bankruptcy court. She was appointed to the court on March 5, 2010, and her current term will expire on March 4, 2024.

Prior to joining the court, Chapman was a partner with the firm Willkie Farr & Gallagher LLP for ten years.

Elisha D. Graff

Partner
Simpson Thacher & Bartlett LLP

Elisha D. Graff is a Partner in the Firm’s Restructuring and Bankruptcy Department. He regularly represents clients in connection with out-of-court restructurings and Chapter 11 cases. His work has focused primarily on advising financial institutions with their loans to companies and debtors in connection with their Chapter 11 cases. Elisha has regularly represented JPMorgan Chase Bank, N.A. and other financial institutions as administrative agent for secured lending syndicates in connection with in-court and out-of-court restructurings. He is also regularly called upon to assist the Firm’s private equity clients with their portfolio companies that are in distress or in potential need of a restructuring, plan sponsors, and acquirers of distressed companies, as well as financial advisers with retention matters.

Recently, Elisha’s work has included acting as counsel to: J.G. Went-worth in connection with its financial restructuring through a pre-packaged Chapter 11 case JPMorgan Chase Bank, N.A., as administrative agent under EV Properties’ pre-petition reserve based credit facility and exit reserve based credit facility, in EV Properties’ pre-packaged Chapter 11 case First Reserve, as equity sponsor and debt holder, in connection with the Chapter 11 case of its portfolio company AFGlobal Corporation Apax, as equity sponsor and debt holder, in connection with the Chapter 11 case of its portfolio company Answers Corporation JPMorgan Chase Bank, N.A., as administrative agent under Halcon Resource Corporation’s pre-petition reserve based credit facility, $600 million debtor-in-possession financing facility and $600 million exit reserve based credit facility, in Halcon’s pre-packaged Chapter 11 case Templar Energy LLC with a financial restructuring that resulted in the extinguishable of $1.45 billion in second lien debt, a new equity investment of $365 million, and an amended reserve based credit facility with a $600 million borrowing base JPMorgan Chase Bank, N.A., as administrative agent under Swift Energy Company’s pre-petition reserve based credit facility, and as sole lead arranger and sole book runner in Swift’s $500 million exit facility, in Swift’s Chapter 11 case In addition, Elisha represented Apax Partners, as equity sponsor and holder of over $1.2 billion of debt, in connection with the Chapter 11 case of its portfolio company Cengage Learning. He has also represented Motor Coach Industries International, Inc., and its affiliates in connection with their Chapter 11 cases.

Elisha has also acted as counsel to the Lenders in several large Chapter 11 cases, including Logan Roadhouse, Inc., Oriental Trading Company; Station Casinos, Inc.; Smurfit-Stone Container Corporation; Idearc Inc.; NextMedia Group, Inc.; Lear Corporation; Adelphia Communications Corp.; Federal-Mogul Corporation; GT Brands, LLC; RCN Corporation; Galey & Lord, Inc.; GenTek, Inc.; and Recoton Corporation. Elisha has regularly acted as counsel to PJT Partners and other financial advisers in connection with retention and compensation matters in the various restructuring and bankruptcy engagements in which the financial advisers are involved.

Elisha received his B.A., magna cum laude, from Yeshiva University in 1997 and his J.D., cum laude, from Harvard Law School in 2000.

William H. Henrich

Co-Chairman
Getzler Henrich & Associates, LLC

William H. Henrich is co-chairman of Getzler Henrich, a leading corporate restructuring firm focused on middle-market companies. The restructuring industry publication “Turnarounds and Workouts” has named Getzler Henrich one of the top firms for many consecutive years. Bill has more than thirty-five years of experience, with over 400 engagements.

He was named to the Turnaround Management Association (TMA) Hall of Fame in 2018, an honor recognizing those practitioners who have increased the stature, and respect of the industry. Mr. Henrich is a former president and current advisory board member of the TMA’s New York chapter, current TMA Global board member and VP – Education, Board member of the ABI, member of the Association of Corporate Growth and a regular speaker and author. He served as Co-Chairman of the ABI’s Bankruptcy Reform Commission Governance Committee.

A certified public accountant, he holds a master’s degree in business administration from Harvard Business School and a bachelor’s degree from Baruch College, City University of New York.

Roger G. Schwartz

Partner
King & Spalding LLP

Roger G. Schwartz is a finance partner in the New York office of King & Spalding. He represents public and private companies, agents, lenders, strategic and financial buyers, and investors in a broad range of restructuring matters, including Chapter 11 cases, out-of-court restructurings, and bankruptcy-related acquisitions, sales and financings. He also advises equity sponsors, portfolio companies and directors in connection with liability management transactions and corporate governance issues in distressed and out-of-court situations and transactions.

Additionally, Mr. Schwartz has an active practice representing major financial institutions and other clients in bankruptcy and commercial litigation matters.

Prior to private practice, Mr. Schwartz was a senior counsel of workouts at General Electric Capital Corporation (GE Capital), where he provided legal oversight for a multibillion-dollar portfolio of GE Capital lending commitments. While at GE Capital, Schwartz also acted as a director of litigation where he directed legal strategy and case management for a diverse set of commercial litigation, compliance and regulatory matters.

Mr. Schwartz is a frequent lecturer, speaker and author on restructuring, bankruptcy and insolvency topics and he has served as Co-Chair, Advisory Board member, moderator and panelist for numerous American Bankruptcy Institute conferences.


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