Asset Sales Committee Meeting Minutes

2007 Annual Spring Meeting

On April 14, 2007, the ABI’s Asset Sales Committee met in Scottsdale, Arizona, in connection with the ABI’s 2007 Annual Spring Meeting.  Conducting the meeting on behalf of the Asset Sales Committee were Daryl Martin and Fernando Torres of CONSOR.

The highlight of the meeting was the educational program entitled “Distressed M&A – the Impact of Changing Financial Markets, Credit Bidding, BAPCA and Other Recent Developments.”  The discussion was led by Robert P. Simons from the Pittsburgh office of Reed Smith LLP, Sharon L. Levine from the Roseland, NJ office of Lowenstein Sandler PC and Benjamin D. Feder from the New York office of Thompson Hine LLP.  The panel discussed the impact of new players such as hedge funds and private equity funds in the distressed markets, the impact of second lien lending and the use of the 363 sale process to re-order creditor priorities.  There was active participation from the committee members in attendance and many excellent ideas raised and discussed.

Following the conclusion of the educational panel, the meeting was adjourned.  Subsequently, several committee members stayed afterwards to discuss the recent 363 sale auction of Tower Records’ intellectual property and issues relating to the valuation and marketing of trademark(s) and e-Commerce assets in a Chapter 11 bankruptcy.

Many thanks to the educational panelists for their excellent contribution.

2006 Winter Leadership Conference

On December 1, 2006, the ABI's Asset Sales Committee met in Scottsdale, Arizona, in connection with the ABI's 2006 Winter Leadership Conference. The Asset Sales Committee meeting was conducted jointly with the ABI's International Committee. Conducting the meeting on behalf of the Asset Sales Committee were Committee Co-Chairmen David Peress and Weston Anson.

Mr. Peress commenced the meeting by making the following announcements:

- The Committee Co-Chairmen had recently initiated a request for potential topics for the educational program for the Annual Spring Meeting utilizing the Committee's list serve. Several excellent proposals had been made. Mr. Peress indicated that more ideas were welcome and that the ABI's Education Director Bob Keach had reached out to all of the committees seeking input not only for the Annual Spring Meeting but for regional meetings as well.

- The Committee continued to publish a quarterly E-Newsletter. The E-Newsletter offered an excellent opportunity for Committee members to publish articles or promote new ideas related to asset sales. Mr. Peress commended Gary Jacobson for his excellent work as editor of the E-Newsletter and suggested that members with proposed content contact either the Co-Chairmen or Mr. Jacobson directly.

- The Committee had completed the Intellectual Property handbook edited by Wes Anson and Geoff Berman. The ABA had accepted the handbook for publication and it was currently being reviewed by the ABI as a potential joint publisher. The expectation was that the handbook would be published early next year.

Following announcements on behalf of the International Committee, the joint educational presentation was made. The presentation was titled: Collins & Aikman Europe and Other Cross-Border Asset Sales: A Tale of Two Venues. The panel was moderated by Josefina Fernandez McEvoy, Co-Chairperson of the International Committee and Weston Anson, Co-Chairman of the Asset Sales Committee. The panel speakers were: Thomas Zambelli, Kroll Zolfo Cooper, Chief Restructuring Officer for Collins & Aikman, Inc., David L. Eaton, Esquire, Kirkland & Ellis, LLP, lead U.S. and European counsel for Collins & Aikman, Inc., and Fernando Torres, CONSOR, lead European intellectual property valuator for Collins $ Aikman, Inc. The panel discussed some of the challenges faced by the management and professionals employed in the Collins & Aikman Chapter 11 bankruptcy case and in its UK administration. In particular, the panel focused on the conflicts and strategy employed by the respective parties in connection with the sale of Collins & Aikman's European assets and the steps taken to protect the interests of the Collins & Aikman, Inc. estate in the intellectual property and intangible assets embedded within those European assets. A detailed power point presentation accompanied the panel discussion.

Following the educational panel, the meeting was adjourned.

2006 Annual Spring Meeting

A meeting of the ABI’s Asset Sales Committee was convened at 8:00 a.m. on April 22, 2006, in connection with the ABI’s Annual Spring Meeting.  The meeting was a joint meeting that included the Finance and Banking Committee.  Presiding at the meeting were Committee Co-Chairmen David Peress and Weston Anson together with Finance and Banking Committee Co-Chairman, Peter Antoszyk.

Mr. Anson reviewed some of the committee initiatives over the past six months and noted the contributions made to those initiatives by specific members.  Among the matters discussed were:

  • The continued progress toward completing the ABI Handbook on Intellectual Property With assistance from editor Geoff Berman, the handbook is essentially complete and is expected to be published shortly.
  • Rick Tilton advised the Committee that he had received the go ahead from ABI to generate a second edition of his Asset Sales Handbook and invited Committee members with an interest in contributing to the book to contact him.
  • The Committee continues to solicit interest from its members to draft articles to be published in its e-newsletter, of which it has circulated several with the assistance of editors Gary Jacobson and Paul Forshee.
  • The Committee Listserve is up and running with the assistance of moderators Eric Anderson, Dov Frankel and Henry David.
  • The Committee is soliciting ideas for educational topics that could serve as content for future Committee meetings or regional conferences.  Ideas should be filtered through the committee co-chairmen.

On behalf of the Committee, Mr. Anson extended thanks to all of the members who had contributed to the foregoing initiatives.  He then introduced the panelists who were there to present the educational portion of the meeting.  They were Racquel Palmer of KPS Funds in New York, Larry Halperin of Richards Spears Kibbe & Orbe in New York, Lawrence Gelber of Schulte Roth & Zabel LLP in New York, and Committee Co-chairman Wes Anson of CONSOR in La Jolla, Calif.

The panel discussion centered on the use of “loan to own” strategies by non-traditional lenders to distressed companies.  The panel discussed some of the techniques being utilized to implement loan to own strategies and some of the concerns those strategies cause for borrowers and other interested parties.  The written materials for the meeting were supplied by Asset Sales Committee Co-Chairman David Peress from XRoads Solutions Group, LLC in New York in the form of an article written by Mr. Peress and Cord Prinzhorn, which was published in the April issue of the ABI Journal titled "Non-Traditional Lenders and the Impact of Loan-To-Own Strategies on the Restructuring Process.”  The written materials were included in the CD ROM educational materials distributed at the Annual Spring Meeting.

Mr. Peress and Mr. Anson thanked the panelists for their hard work in putting together their presentation and at 9:30 a.m., the joint meeting of the Asset Sales Committee and the Finance and Banking Committee was adjourned.

2005 Winter Leadership Conference

A meeting of the ABI’s Asset Sales Committee was convened at 9:30 a.m. on December 3, 2005, in connection with the ABI’s Winter Leadership Meeting. Presiding at the meeting were Committee Co-Chairmen David Peress and Weston Anson.

Weston Anson reviewed with the members some of the Committee initiatives over the past six months and noted the contributions made to those initiatives by specific members. Among the matters discussed were:

  • The continued progress toward completing the ABI Handbook on Intellectual Property. A comprehensive manuscript has been completed and is currently being edited by Geoff Berman.
  • The Committee continues to solicit interest from its members to be published in its E-newsletter. Since the Annual Spring Meeting, the Committee has circulated two E-newsletters with the assistance of editors Gary Jacobson and Paul Forshee.
  • The Committee Listserve is up and running with the assistance of moderators Eric Anderson, Dov Frankel and Henry David.
  • The Committee is soliciting ideas for educational topics that could serve as content for future Committee meetings or regional conferences. Ideas should be filtered through the Committee Co-chairmen.

On behalf of the Committee, Mr. Anson extended thanks to all of the members who had contributed to the foregoing initiatives.

David Peress then addressed the Committee and discussed the opportunity for members to create and submit content for the ABI Web Site and the ABI Journal. Mr. Peress recommended that Committee members who had not recently done so should go on the ABI Web Site and review the ABI-sponsored blog covering developments under the BAPCPA.

Mr. Peress then introduced the Committee members who were there to present the educational portion of the meeting. They were Robert Brady of Young Conaway Stargatt & Taylor in Wilmington, DE, Kit Weitneur of Alston & Bird in Atlanta, GA and Jeffery Levitan of Proskauer Rose in New York, NY. Also participating with the panel was Committee Co-chairman Wes Anson of CONSOR in La Jolla, CA.

The panel discussion centered on the anticipated impact of the recently-enacted Bankruptcy Code provisions on asset sales. The panel discussed the impact of the law changes on leased real estate and businesses with many leased facilities. The panel also addressed the sale of intangible assets and the impact of the law on historic valuation standards. Finally the panel discussed current 363 sale practice in administratively insolvent estates and considered whether there were non-bankruptcy alternatives that sellers and secured lenders could utilize to minimize administrative expenses created by the new statute. Written materials prepared by the panelists were included in the educational materials book distributed at the Winter Leadership Meeting.

Mr. Peress thanked the panelists for their hard work in putting together their presentation and at 11 a.m., the Asset Sales Committee meeting was adjourned.

2005 Annual Spring Meeting

A meeting of the ABI’s Asset Sales Committee was convened at 9:30 a.m. on April 30, 2005, in connection with the ABI’s Annual Spring Meeting. Presiding at the meeting were committee Co-chairmen David Peress and Richard Tilton.

David Peress led off the meeting by advising the committee that after more than a decade of service, Rick Tilton had decided to step down as committee Co-chairman. Mr. Peress thanked Mr. Tilton for his guidance and leadership to the Committee.

Mr. Tilton addressed the committee and reflected back on its formative years as the Asset Sales Task Force, before it was even elevated to official committee status. He commented on how important the §363 assets sales process had become to most bankruptcy and restructuring professionals and how the committee had grown in size and prominence as a result. Mr. Tilton advised the committee that he had reached an agreement with the ABI to create a second edition to his book Bankruptcy Business Acquisitions which would be jointly marketed by Mr. Tilton and the ABI. He noted that the last supplement to the first edition had been created in March 2002 and with the evolution in practice and new Bankruptcy Code amendments, a new edition was now appropriate. Rick indicated that he may reach out to certain members of the committee to solicit their participation in this project.

Mr. Peress then introduced the incoming Co-chairman, Wes Anson, chairman of CONSOR, an intellectual asset consulting firm. Mr. Anson’s appointment as Co-chairman becomes effective at the conclusion of the Annual Spring Meeting. Mr. Anson indicated that he had undertaken the responsibility for producing the committee’s enewsletter and invited input and participation from both lawyer and non-lawyer members of the committee.

Finally, Mr. Peress indicated that as part of the ABI’s Get Involved campaign, there were many opportunities for Committee members to participate in the development of the committee’s educational programs and other initiatives. He asked that any members interested in helping develop the committee’s program for the Winter Leadership Conference contact him with the view that they would form a working group to design a program that would address the affects of the new Bankruptcy Code amendments on the asset sales process.

At that point, Mr. Peress introduced the educational portion of the meeting which was the first of a two part presentation moderated by Rick Mikels of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC titled “Getting the Deal Done: Asset Sales in Bankruptcy Proceedings.” The other panelists were Howard Brownstein of NachmanHaysBrownstein Inc., Andy Grasier of DJM Asset Management, Carmen H. Lonstein of Bell, Boyd & Lloyd LLC, David Peress of XRoads Solutions Group LLC and Lisa M. Poulin of FTI Palladium Partners. Former Asset Sales Committee Co-chairman Benjamin Nortman of Hilco Trading Co. Inc. participated in the preparation of the materials but was unable to attend the presentation.

The panel utilized a power point Q&A to stimulate discussion concerning various issues and decisions that need to be made at each step of the sale process. They discussed different choices that parties could make and the pros and cons of each. The panel discussion continued following the conclusion of the Asset Sales Committee meeting as a concurrent educational session and the educational materials produced by the panel were incorporated into the book of educational materials provided to each attendee of the Annual Spring Meeting.

At 11 a.m., the Asset Sales Committee meeting was adjourned.

2004 Winter Leadership Conference

The Asset Sales Committee met at 9:30 a.m. on December 3, 2004, during the ABI Winter Leadership Conference. Co-Chairman David Peress chaired the meeting. It was well attended with a standing room only audience.

After a general discussion of Committee business including a request for ideas for the Committee’s E-Newsletter and the 2005 Annual Meeting, Mr. Peress introduced the two primary speakers for the educational session: Jay Indyke, a partner with Kronish Lieb Weiner & Hellman in New York, NY and Robert Sattin, a partner with Reid and Reige in Hartford, CT. Marc Puntus, an investment banker with Miller Buckfire & Lewis had been scheduled to speak as well but was forced to cancel at the last minute.

The topic for the Committee’s educational program was “Aggressive Strategies in Section 363 Sales.” In connection with the program, Mr. Peress distributed to the attendees four recent articles from the ABI Journal dealing with: (i) finality in auction sales, (ii) pre-auction auctions involving the selection of “stalking horses”, and (iii) chapter 11 filings designed to facilitate liquidations via a Section 363 sale. Mr. Peress moderated the panel’s discussion.

Finality in Auction Sales

Mr. Indyke reviewed the facts of the recent Bob’s Stores bankruptcy auction where Bankruptcy Judge Kornreich issued an order directing a sealed bid auction. After the sealed bids were examined and the winner declared, the debtor went forward to confirm the sale to the high bidder. In the context of the hearing, however, the Court injected additional issues to be considered in determining the highest and best bid and ultimately confirmed the sale to the second highest bidder based upon the newly injected considerations.

Mr. Sattin reviewed the recent Seventh Circuit decision in Corporated Assets Inc. v. Paloian, 368 F.3d 761 (7th Cir. 2004), where the Court was given the opportunity to examine the standards for allowing a bid to be made after the conclusion of an auction conducted in accordance with Court authorized bidding procedures. Mr. Sattin noted, however, that despite the opportunity provided by the case, the Court had not provided any clear guidance on when the finality of an auction will be preserved.

A lively discussion among the panelists and the attendees ensued. While many in the room expressed the view that the integrity of the process was jeopardized when Courts allowed parties to deviate from approved bidding procedures, there seemed to be allot of support for the view that the Court and other interested parties’ primary goal was to maximize value under any circumstances and, therefore, the finality of an auction could never be taken for granted.

The Stalking Horse Selection Process

Mr. Peress kicked off this discussion by discussing the Top Flite Case in Delaware where at the bidding procedures hearing, the Court entertained an objection from a prospective bidder that had not been chosen by the debtor as the “stalking horse.” Through the Court’s intervention, the terms of the initial stalking horse proposal were re-negotiated to eliminate a $1 million break up fee. Mr. Peress asked the panel to address whether the Court’s actions amounted to judicial activism and what were the appropriate criteria for selecting a stalking horse where multiple financially capable bidders are pursuing the same asset.

Different stages in the pre-sale process were examined and commented upon by the panelists and various attendees. There appeared to be disagreement concerning the value of the stalking horse and the expense associated with break up fees, especially when dealing with strategic, as opposed to financial buyers. Based on the level of interest in this subject, it may be worthwhile to explore some sort of joint session with the Investment Banking Committee at a future meeting.

Chapter 363 Cases

The last subject addressed by the panel involved Chapter 11 cases filed solely to facilitate 363 sales to effectuate a liquidation. There seemed to be a divergence of views among the panelists and meeting participants concerning the propriety of certain practices in this area. The panel sought to distill the perceived benefits realized by various parties in interest from using Chapter 11 as a platform to effectuate such transactions.

Mr. Indyke stimulated an intense discussion concerning the propriety of such cases when the debtor is administratively insolvent at the outset of the case. In these situations the asset sale is typically followed by a structured dismissal or a conversion to a no asset Chapter 7. The Committee could have spent much more time on this aspect of the issue and it may be that the propriety of commencing Chapter 11 cases by administratively insolvent debtors purely to facilitate a sale may warrant further and more expansive discussion by the Asset Sales Committee at a future meeting.

The meeting was adjourned at 11:00 a.m.

2004 Annual Spring Meeting

The Asset Sales Committee presented a program on “Current Developments in Asset Sales.” Program moderators were Richard Tilton and David Peress, committee co-chairs. Speakers were Pauline Morgan, a partner at Young Conway Stargatt & Taylor LLP in Wilmington, Del., and Chester Salomon, a partner in the NYC bankruptcy firm, Salomon Green & Ostrow PC. Pauline discussed recent Delaware cases involving stalking-horse bidders and break-up fees. Audience members Bob Sattin and Jeff Sabin, among others, raised interesting questions about how break-up fees are treated when the stalking-horse is not the high bidder and how bankruptcy judges should evaluate or characterize the break-up fee when determining which competing offer is the highest and best offer. Chester Salomon discussed an important case out of the Southern District of New York dealing with the allocation of sale proceeds where the debtor/seller is actually more than one legal entity and creditors are disputing the debtors’ business judgment in allocating the sale proceeds between different estates. The panel also discussed recent cases on appeals of sale orders, finding no major developments from the general rule that absent a stay it is unlikely that a sale order will be reversed on appeal. Pauline and Chester did review some narrow exceptions to the general rule. Written materials were prepared by Richard Tilton; if you would like a copy of the materials, please email him at

New Business: The committee solicits all ABI members to submit short articles (500-1,000 words) for publication in the committee’s e-newsletter. If you would like to submit an article, please contact David Peress or Rick Tilton. The committee is also looking for members who would like to participate in panel presentations. We encourage “young” members to contact us and to participate in committee activities.

2002 Winter Leadership Conference

We had a joint program with the Technology and Telecommunications Committee presented by Brian Sagi, President and CEO of Cerian Technology Ventures LLC, entitled, “Making the Most of Distressed Technology Assets,” including the following topics:

  • Introduction to Distressed Technology Asset Transactions and their Importance
  • How to Extract Maximum Value from Distressed Technology Assets
  • What is the Market for Such Distressed Technology Assets
  • Anatomy of a Distressed Technology Asset Transaction (detailed case study)
  • Industry Trends
  • Summary and Conclusions

The co-chairs of our Committee served as moderators.

Following the program, we discussed the status of the IP/bankruptcy handbook project and the draft outline thereof, the committee newsletter, and the one-day intellectual property and bankruptcy program, including numerous potential opportunities for members. The co-chairs intend to circulate a draft handbook outline with a request for participation in the next couple weeks.

The Asset Sales Committee is seeking volunteers to help the committee launch its ABI e-newsletter. If you would like to volunteer, please contact the committee co-chairs, Ben Nortman and Rick Tilton.

2001 Winter Leadership Conference

The committee decided to form a subcommittee that would examine issues unique to bankruptcy sales and auctions of intellectual property, the Intellectual Property Subcommittee. The subcommittee will have two chairs and seeks the active involvement of new members. The initial subcommittee goal is to recruit new members, decide what to study, and prepare a panel discussion for presentation at the ABI Annual Spring Meeting in 2002. If you would like to be a member of the subcommittee, please contact Rick Tilton by e-mail at with a copy to Ben Nortman at Send your bio, complete contact information and an indication of what role you would like to play.

We would like to define some areas of study/research. Set forth below is a non-exclusive outline of some of the topics that the subcommittee could examine. This is a first draft and we would like your input, suggestions, refinements and comments:

  • Intellectual Property/Intellectual Capital Due Diligence issues, due-diligence checklist.
  • Develop a form of confidentiality agreement that is particularly suited to sales of IP and the transfer of confidential information by employees.
  • Valuing IP assets in the context of a bankruptcy liquidation
  • Web site sales, including identifying, valuing and selling domain names. Assumption and assignment of domain name contracts.
  • Assumption and assignment of licenses and other IP related contracts.
  • IP employees. Keeping the tech team together. Enforceability of non-competition agreements when employees are owed wages or an employment agreement has been breached.
  • Patents. Identifying and maintaining registrations. Issues about transferability and assignability of non-exclusive patent licenses. Catapault decision and progeny.
  • Software. Development agreements, software licenses, source code escrows. Restrictions on use of licensed software.
  • Trademarks. Assignability. Anti-assignment in gross rule.
  • Code §365(n). Interpretation. Suggested amendments.
  • Create a package of forms for the transferability and assignability of IP As Is, Where Is, without warranties or representations. As a practical matter, what does counsel for the buyer want that will facilitate transfers of IP, both at the closing and in future support of the acquired IP.

2000 Annual Spring Meeting

The committee hosted a presentation on “Canadian Insolvent Company Asset Sale Transactions,” moderated by Howard Berman (Greenberg Traurig; New York). Steven Golick (Osler Hoskin & Harcourt; Toronto) and Robert M.C. Holmes (PricewaterhouseCoopers Inc.; Toronto) explained the mysteries and pleasures of Canadian alternatives for asset sales, discussing the pros and cons of various private procedures and judicial techniques from the different perspectives of secured and unsecured creditors. The committee also sponsored presentations on the use of the Internet to market assets or sell companies as going concerns. Presentations were made by David Marchick (; Silver Spring, Md.), Michael Goldman (;New York) and Joe Bodoff (; Boston), who demonstrated the time-efficient ways to broadly market assets that are often difficult to sell.

1999 Winter Leadership Conference

The Asset Sales Committee presented a panel discussion titled “Canadian–U.S. Cross-border Asset Sales,” moderated by Richard Tilton. The speakers for the presentation were Robert M.C. Holmes, a partner with PricewaterhouseCoopers LLP in Toronto, and Steven G. Golick, a partner in the international law firm of Osler, Hoskin & Harcourt LLP in Toronto. Mr. Holmes presented a paper on “Realization of Assets in Canada,” an overview of issues of importance to a purchaser of assets located in Canada. Mr. Golick’s paper, “Canadian Insolvent Company Asset Sale Transactions,” dealt with the issues from a legal perspective, discussing the role of receivers in the disposing of assets. Also distributed were pleadings related to “Canadian–U.S. Cross-border Insolvency Protocols,” compiled by Mr. Tilton. The committee also discussed current developments in selling assets over Internet auction sites.

1999 Annual Spring Meeting

The Asset Sales Committee heard a presentation from Fox & Associates on techniques and strategies for marketing and auctioning real property, machinery and equipment. A lively discussion ensued on topics including the use of a buyer’s premium in bankruptcy auctions, recognizing collusive bidding, preparation of property for sale and criticism of limitations on auctioneer’s compensation in certain judicial districts.

The committee also discussed its ongoing efforts to create an informative database of investors in financially troubled companies. Mitch Cohen of Gordon Brothers agreed to assist Ken Rosen and Richard Tilton in revising the questionnaire, which can be obtained by contacting Richard Tilton at

New business included the formation of three new subcommittees to prepare educational materials and future presentations. Any ABI member is welcome to participate in the subcommittees by contacting Richard Tilton. The new subcommittees are:

  • Canadian Asset Sales: Will discuss Canadian rules that come to play when a Canadian subsidiary or division of a U.S. debtor seeks to sell assets or liquidate.
  • Bidding Procedures and Judicial Fair Play: Will discuss late bids, financial qualification and amendments of bidding orders and the effect on judicially supervised auctions, buyers’ expectations, etc.
  • Internet Distressed Asset Sales: Will discuss existing Internet postings of asset sales, use of the Internet for auctions and coordinating discussions with the National Association of Bankruptcy Trustees, which has an existing site for trustee sales.

1998 Winter Leadership Conference

Co-chair James H.M. Sprayregen (Kirkland & Ellis; Chicago) moderated a discussion on “Tough Valuation Issues of ’90s Companies—Does No Cash Flow Mean No Value?” Todd Snyder (Peter J. Solomon Co.) and Robert L. Dangremond (Jay Alix & Associates; New York) discussed a number of valuation issues, techniques and methodologies arising in troubled and bankruptcy situations.

Co-chair Richard Tilton (Greenberg Taurig; New York) reported on the efforts of the Directory of Investors in Financially Troubled Companies Subcommittee to develop a written work product. He solicited any individual who is interested in becoming involved in the subcommittee to contact him. The directory is moving along in its development stages. Please call him at (212) 801-9200.

Reggie Jackson (Vorys, Sater, Seymour & Pease; Columbus, Ohio) solicited the interest of members to write articles of 750–1,000 words for "Cracking the Code" at the ABI website. Any interested party should contact him at (614) 464-5621.