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
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
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
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
Mr. Peress commenced the meeting by making the following
- 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
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
- 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
- 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
- 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
- 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
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
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
- 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
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
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
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
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
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 email@example.com.
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
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
- 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
- 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 firstname.lastname@example.org
with a copy to Ben Nortman at email@example.com.
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,
- Develop a form of confidentiality agreement that is particularly
suited to sales of IP and the transfer of confidential information by
- 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
- 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
(bid4assets.com; Silver Spring, Md.), Michael Goldman (eMergers.com;New
York) and Joe Bodoff (Bankruptcysales.com; Boston), who demonstrated the
time-efficient ways to broadly market assets that are often difficult to
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 firstname.lastname@example.org.
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,
- 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.