by Jean R. Robertson
Calfee, Halter & Griswold, LLP; Cleveland
An emerging strategy many hedge and private equity funds are pursuing is known as the “loan-to-own” investment. In this type of investment, a fund’s investors acquire debt and sometimes certain amounts of equity or management control, such as voting power or board seats, from a lender of a distressed company. The fund often buys the debt at a deep discount, then nudges the company toward a bankruptcy filing where the fund can take advantage of the economic leverage associated with the face amount of the debt it acquired to turn the debt into an equity ownership of the company in the chapter 11 process.
Read the full article.
by Thomas D. Bibby
FTI Consulting, Inc.; Dallas
Barrett Lidji
FTI Consulting, Inc.; Dallas
Creditor committees use valuation reports in a variety of ways, and it is important for the lawyer or financial advisor to help the committee understand how to read and evaluate a valuation report. Among other things, valuation reports help assess the treatment of creditors in a proposed plan, determine the appropriate disposition of an asset or division, evaluate debt capacities and estimate potential recoveries. Although valuation results are used to make critical decisions on how the committee will proceed, valuation conclusions are more art than science and deserve critical analysis and review. By understanding the limitations of common valuation methods, advisors can appreciate the inherent uncertainty in the valuation process, evaluate the quality of conclusions, review the appropriateness of the methodology used, and determine the weight the valuation should be given in reaching a decision.
Read the full article.
ABI's 21st Annual Winter Leadership Conference will take place Dec. 3-5 at the gorgeous La Quinta Resort & Club in La Quinta, Calif. La Quinta is the classic Palm Springs resort, nestled at the base of the Santa Rosa Mountains. Enjoy the beautiful landscape, as well as renowned tennis, golf and the spa. This year's conference will offer insights from some of the top insolvency and restructuring experts on issues confronting the profession in 2010.
The Unsecured Trade Creditors Committee will partner with the Asset Sales and Secured Credit committees to present a session entitled "Polaroid and Beyond: Differing Perspectives on What Is the Highest and Best Bid and Other Selected Sales Issues" on Saturday, Dec. 5 at 9:30 a.m. Douglas Deutsch of Chadbourne & Parke, LLP in New York will moderate. Panelists will include Ronald E. Gold of Frost Brown Todd LLC in Cincinnati, Rafael Klotz of Gordon Brothers Group, LLC in Boston and Hon. Donald H. Steckroth of the U.S. Bankruptcy Court (D. N.J.) in Newark, N.J. Register today!
