Attention:

Loans-to-Own: How Do You Do It? Should You Do It?


Level: Advanced
Runtime: 67 minutes
Recorded Date: July 21, 2017
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Agenda

9:30 am - 10:45 am
  • Overview
  • The Distressed Sale Process vs. the Conventional Sale Process
  • Assimilation of Data and Analysis of Optimal Path
  • Final Checklist
  • The Basis for Credit Bidding under State Law and the Bankruptcy Code
  • Limitations under Section 363(k)
  • A More Expansive View of Section 363(k)
  • Lessons from the Cases
Runtime: 1 hour and 7 minutes
Recorded: July 21, 2017.

Description

The strategy of providing funding to troubled companies or purchasing existing secured debt at a discount in order to obtain ownership (so-called “loans-to-own”) continues to inspire controversy and litigation even as its use by debt financiers and other investors has become more commonplace.

This panel explores the practical considerations, business risks and legal issues associated with loans-to-own, both inside and outside of bankruptcy. Discussion on transactions outside of bankruptcy will include the scope of due diligence, intercreditor issues, insider participation, “bankruptcy-proofing,” and the risks and benefits of a “friendly foreclosure.” Discussion on transactions inside of bankruptcy will include using DIP financing to achieve ownership, potential limits on credit bidding, the impact of including or excluding insiders from the post-closing company, and risks presented by remedies such as equitable subordination and involuntary debt recharacterization.

This program was recorded on July 21st, 2017.

Provided By

American Bankruptcy Institute

Panelists

Hon. Christopher J. Panos

U.S Bankruptcy Judge
U.S. Bankruptcy Court for the District of Massachusetts

Judge Panos practiced at Craig and Macauley P.C. in Boston for more than 25 years and served as its Managing Shareholder until the attorneys at that firm joined Partridge Snow & Hahn, LLP to open its Boston office. He served as Partner in Charge of the Boston office until his appointment.

Panos earned his undergraduate degree from Georgetown University and his J.D. from the Boston University School of Law.

Donald E. Rothman

Senior Partner
Riemer & Braunstein, LLP

Don is co-chair of the firm's Commercial Finance practice within our Financial Services Group. His areas of concentration include asset based lending, leveraged finance, equipment finance, and cash flow lending for local, regional, and national clients, including large national banks and financial institutions as well as private lenders. Don represents the agent in a lending syndicate, lenders within a lending syndicate, as well as private, independent lenders. For clients with transactions in early stages of financing, he structures and documents their loan arrangements.

Don also focuses on intercreditor arrangements, creditors' rights, mid-course loan restructurings, and troubled debt workouts. He counsels on the enforcement of creditors' rights and remedies in loan arrangements when efforts to implement alternative resolutions have been unsuccessful. Don has extensive experience in handling workouts, bankruptcy proceedings, and debtor-in-possession financing for new and existing lenders.

Overall, Don advises clients regarding credit arrangements with companies who operate in a broad spectrum of industries, including financial services, high-tech, life sciences, retail, real estate development and finance, and manufacturing.

Don travels nationally to advise clients on financial arrangements, implement forbearance agreements, enforce lenders' rights and remedies, and appear in bankruptcy courts. He has handled complex cases in 48 states throughout the country, and has appeared in dozens of bankruptcy courts in connection with such matters. Don is also a frequent lecturer to clients and panelist at national conferences on legal issues and other industry topics.

Jeffrey B. Gaynor

Co-Founder & Managing Director
TrueNorth Capital Partners, LLC

Jeffrey B. Gaynor is a co-founder and Managing Director of TrueNorth Capital Partners LLC. Jeff has been lead banker on dozens of merger and acquisition assignments, representing both sale and buy side clients, during the past twenty years. Cross Border experience is evidenced by Jeff’s representation of dozens more Asian clients buying or selling in North America.

Additionally, Jeff is a seasoned restructuring professional and one of the less than 800 individuals to earn the designation as Certified Turnaround Professional. He has developed an extraordinary ability to quickly process complex financial/organizational issues, assimilate relevant data, identify options and develop a critical path for successful execution. His capabilities have been demonstrated by the successful execution of many out of court settlements, sales subject to composition agreements, article 9 sales and sales pursuant to Section 363 of the bankruptcy code. Assignments have included the role of Chief Restructuring Officer, court approved investment banker and court approved financial advisor (for both debtors and creditors).

Prior to co-founding TrueNorth, Jeff was a co-founder of Knox & Co., a boutique middle market investment banking firm. Knox & Co. was focused on cross-border advisory business for global multinationals in Japan, China and elsewhere in Asia and enjoyed a strategic alliance with Bank of Tokyo – Mitsubishi UFJ Ltd. Jeff graduated from Boston University and began his career with Price Waterhouse LLP (now PwC). He left PwC to join BASIX Corp. (NYSE) in its corporate financial group before moving to its leasing subsidiary where he had responsibility for raising third party debt and equity financing for packaged lease transactions.

Jeff holds Series 7, 24, 63, 79 and 99 securities licenses. He previously served on numerous Boards of Knox & Co. and related companies and affiliates both in the US and abroad. Jeff is a past director of the Connecticut Chapter of the Turnaround Management Association (TMA) and a current Director of the New York Chapter of the TMA and Chairman of it’s Pro Bono Committee. Mr. Gaynor is a member of the Association for Corporate Growth, the TMA and the American Institute of Certified Public Accountants.

Barry S. Feigenbaum

Partner
Rogin Nassau, LLC

Barry S. Feigenbaum is a partner in the firm's business, corporate and commercial law and bankruptcy and reorganization groups. He handles various types of commercial transactions, bankruptcy matters and out-of-court debt restructurings. Mr. Feigenbaum has represented numerous borrowers in financing transactions and debtors restructuring their businesses in the U.S. Bankruptcy Court. He has significant experience in the sale and acquisition of operating businesses through the bankruptcy process and representing secured lenders in bankruptcy and foreclosure proceedings. He also represents real estate developers in the acquisition, financing and sale of commercial real estate projects. Mr. Feigenbaum has lectured on bankruptcy and debt restructuring. He has been designated a New England Super Lawyer, has held an AV rating from Martindale Hubbell for more than 20 consecutive years and is a fellow of the Connecticut Bar Foundation. Mr. Feigenbaum currently serves as Co-Chairman of the Commerical Law Committee, Hartford County Bar Association.

Prior to joining the firm in 1989, Mr. Feigenbaum was the Associate General Counsel of Coleco Industries, Inc., formerly a New York Stock Exchange Fortune 500 company, where he represented that company on various financial and corporate matters. He also has prior experience in private practice representing companies in financial matters.

Mr. Feigenbaum is a graduate of The George Washington University (B.B.A. Accounting, with distinction, 1978) and University of Connecticut School of Law (J.D. with honors, 1981).


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