Articles

Vendors in bankruptcy proceedings often face uncertainty and financial risks due to the complexities of the process and potential misconceptions about vendor protections. This article aims to dispel common myths and provide insights into navigating the bankruptcy landscape effectively. Key Points Administrative claims do not guarantee full payment, and critical vendor status is not an automatic assurance of reimbursement. Vendors are not obligated to continue pre-bankruptcy credit terms, and 20-day claims should be valued differently than regular unsecured claims. Supporting a debtor's reorganization does not guarantee long-term customer retention, and the "too big to fail" notion is often misleading. Recommendations Vendors should exercise caution, seek professional advice, and understand their rights to protect their financial interests throughout the bankruptcy process.

This article discusses the potential for single-asset real estate (SARE) cases to provide a solution to preserve real estate value during the COVID-19 pandemic. The author argues that suspending restrictions on SARE cases would enable the bankruptcy court to be a better venue for value preservation of real estate. The author also argues that this solution would reinforce the balance of socio-economic and equitable considerations.

Expedited Chapter 11 bankruptcies are becoming increasingly popular as a way for financially distressed companies to restructure their debts and avoid liquidation. These cases are typically characterized by a prepetition restructuring process, in which key stakeholders negotiate a reorganization plan before filing for bankruptcy. This can help to streamline the bankruptcy process and minimize costs. However, there are concerns that expedited Chapter 11 cases may compromise due process, as creditors and other parties may not have enough time to participate meaningfully in the proceedings. The article argues that expedited Chapter 11 cases can be a valuable tool for financially distressed companies, but that it is important to strike a balance between speed and fairness. The authors recommend that companies engage in thorough prepetition restructuring and maintain open communication with all stakeholders throughout the bankruptcy process. They also suggest that companies seek legal counsel from experienced bankruptcy professionals to navigate the complexities of expedited cases. Key takeaways: Expedited Chapter 11 bankruptcies can be a cost-effective way for financially distressed companies to restructure their debts. Prepetition restructuring is important for streamlining the bankruptcy process. Due process concerns should be addressed in expedited cases. Experienced bankruptcy professionals can help companies navigate the complexities of expedited cases.

Compositions are an informal agreement between a debtor company and its unsecured creditors, where creditors agree to accept reduced payments or extended payment terms in lieu of pursuing full repayment through bankruptcy or other legal means. This approach offers several benefits to both parties: For debtors, compositions provide a more flexible and cost-effective path to debt restructuring, avoiding the stigma and legal complexities of bankruptcy. For creditors, compositions offer a higher likelihood of recovering some portion of their debt compared to bankruptcy, where full repayment is often unlikely. To effectively negotiate a composition, several factors should be considered, including creditor consensus, transparency and communication, financial analysis and projections, and professional representation. Tactical approaches to composition negotiations include identifying and engaging friendly creditors, preparing a compelling presentation, anticipating creditor concerns, and maintaining control of the process. The choice of meeting format can significantly impact the dynamics of composition negotiations, with options including face-to-face meetings, conference calls, and online videoconferences. By carefully considering these factors and employing strategic approaches, businesses can increase their chances of achieving a successful composition, regaining financial stability, and ensuring long-term viability.

Vendors face a critical task in safeguarding their financial interests amidst the economic turmoil caused by the COVID-19 pandemic. This guide provides a comprehensive overview of insolvency determinations and practical strategies for vendors to navigate these complex situations. The article emphasizes the importance of understanding insolvency definitions, assessing customer financial health, identifying red flags, and protecting vendor interests. By following these guidelines, vendors can effectively manage their customer relationships and ensure their own financial security in an ever-evolving economic landscape.

The COVID-19 pandemic and the ensuing economic turmoil have brought unprecedented challenges to the real estate industry, leaving many owners and investors facing the prospect of restructuring or bankruptcy. While bankruptcy can offer a lifeline for these entities, single asset real estate (SARE) debtors face unique obstacles due to the current Bankruptcy Code, which favors mortgagees. This article highlights the challenges faced by SARE debtors and advocates for reforms that would empower bankruptcy courts to provide SARE debtors with a fair and equitable restructuring process. Specifically, the article proposes modifications to Section 362(d)(3) of the Bankruptcy Code and the utilization of Section 105(b) to grant SARE debtors more flexibility and protection. The article also addresses concerns raised by lenders and emphasizes the need for market efficiency. It argues that bankruptcy courts are equipped to assess the adequacy of protection for lenders and identify instances of bankruptcy abuse. In conclusion, the article emphasizes that bankruptcy should not be viewed as a last resort but rather as a strategic tool for SARE debtors to navigate the current economic crisis and emerge stronger. By reforming the Bankruptcy Code and empowering bankruptcy courts, the real estate industry can foster a more resilient and equitable landscape.

This article provides a guide for CFOs on how to navigate the turbulent waters of bankruptcy and protect their position and thrive in restructuring. Here are the key strategies to consider: Demonstrate Invaluable Expertise: Showcase your deep understanding of the company's financial situation and provide the CRO with accurate and timely information. Become the CRO's trusted advisor, ensuring they have the insights they need to make informed decisions. Channel Communication Effectively: Serve as the primary point of contact for the CRO, ensuring all information flows through you. This allows you to control the narrative and prevent any misinterpretations or misunderstandings. Protect the Board's Interests: Keep the board informed of all developments and proactively address any potential concerns. Build a strong relationship with the board, establishing yourself as their trusted advisor and advocate. Build Relationships with Creditors: Cultivate positive relationships with creditors and their representatives. Engage in regular communication, addressing their concerns and building trust. Proactive Communication is Key: Keep the CRO informed of any potential issues or concerns raised by creditors or other stakeholders. This proactive approach helps prevent surprises and allows for timely intervention. Treat the CRO as a Potential Employer: View the CRO as a potential future employer, demonstrating professionalism and a willingness to collaborate effectively. By following these strategies, CFOs can not only protect their position but also make themselves indispensable to the company's restructuring efforts. By demonstrating their expertise, building strong relationships, and maintaining transparency, CFOs can navigate the turbulent waters of bankruptcy and emerge as trusted advisors, paving the way for a successful restructuring.

The article underscores the pivotal role of valuation in financial restructuring, emphasizing its impact on creditor recovery, financing, and the delicate balance with secured creditors. It highlights the complexity introduced by uncertainties, particularly macroeconomic factors, in predicting cash flows generated by financial assets. The challenge lies in convincing courts, faced with skepticism, to consider these factors in bankruptcy valuations. Notably, the article addresses the unique considerations posed by the COVID-19 pandemic, advocating for a separate evaluation of macroeconomic factors. It urges a nuanced approach to adjustments, cautioning against arbitrary add-ons and emphasizing the need for thorough analyses. Ultimately, the goal is to foster an informed and transparent valuation process that comprehensively and fairly assesses the true value of distressed assets in the intricate landscape of financial restructuring.

Lowenstein Sandler Selected as Counsel to the Official Committee of Tort Claimant Creditors in the Chapter 11 Bankruptcy of the Diocese of Camden (New Jersey) Lowenstein Sandler has been selected as counsel to the Official Committee of Tort Claimant Creditors in the Chapter 11 bankruptcy case of the Diocese of Camden (New Jersey). Serving approximately 486,368 Catholics living in Atlantic, Camden, Cape May, Cumberland, Gloucester, and Salem Counties, the diocese is comprised of 62 parishes. The Lowenstein team is led by Jeffrey D. Prol, Brent Weisenberg, Lynda A. Bennett, Matthew Boxer, and Kenneth A. Rosen.

In a significant development, Lowenstein Sandler, under the guidance of Kenneth A. Rosen, has been chosen to represent the Official Committee of Unsecured Creditors in the Chapter 11 Bankruptcy proceedings of upscale department store chain Century 21. Headquartered in New York, Century 21 filed for Chapter 11 protection on September 10, 2020, in the U.S. Bankruptcy Court for the Southern District of New York. With 13 retail stores spanning New York, New Jersey, Pennsylvania, and Florida, along with an e-commerce platform, Century 21's bankruptcy case will be navigated by the leadership of Kenneth A. Rosen along with the experienced legal team from Lowenstein Sandler, including Jeffrey Cohen, Lynda A. Bennett, Eric Chafetz, Brent Weisenberg, and Lindsay H. Sklar."