Finance and Banking Committee Meeting Minutes
2004 Winter Leadership Conference
The committee teamed with Investment Banking and presented
“Chapeau, Sombrero or
Fedora: A Lively Discussion About What Hats Investment Bankers, CRO/CRAs
and Turnaround Consultants Are and Should Be Wearing.” How do you
determine whether you have the right professional for the job? This
panel addressed the distinction between financial advisory professionals
hired, or recommended by, financial institutions and the roles they play
at various points throughout a chapter 11 proceeding. Particular
attention was paid to the inherent conflicts that arise among these
professionals as the lines among their service offerings begin to blur.
Peter Kaufman of Gordian Group LLC served as moderator, and the
panelists included James Decker from Houlihan Lokey, Michael Epstein
from TRG.
2002 Winter Leadership Conference
The committee had two presentations: "Bankruptcy Remote
Lending: Will It Survive the Wall Street Shakeout?" On this
panel were two experts—Robert Duffy from FTI Consulting and Krista
Miniutti from Simpson Thacher. Mr. Duffy spoke about the effect that
cases such as Enron and WorldCom have had on Wall Street's
appetite for off-balance sheet financing and the proposed accounting
rule changes that are likely to become effective governing the structure
and reporting requirements of off-balance sheet financing.
Ms. Miniutti discussed the legal structure of off-balance sheet
financing and what changes might be in store given the publicity
surrounding Enron and Worldcom. The panel's discussion engendered a
lively discussion among the almost 50 committee attendees concerning the
examiners report in Enron and the implications of the changes as
they might affect DIP financing.
The committee also heard a report from Susan Armstrong, Sr. Counsel
to PNC Bank, who spoke on the effects of the Third Circuit's decision in
Cybergenesis. While Ms. Armstrong noted that the Third
Circuit's opinion had been vacated, she noted that the decision at the
district court level was still viable and issues raised by
Cybergenesis remain concerns for lenders, particularly in the
context of DIP Financing. Ms. Armstrong discussed the factual and legal
circumstances surrounding the decision and traps that the unwary lender
or counsel to lender could fall into as a consequence of the issues
raised by that decision.
2001 Winter Leadership
Conference
The Finance & Banking Committee hosted a panel on Tranche B
Financing, an important and growing area of asset-based lending. Two
lenders described the product and market: Michael Pizette of Back Bay
Capital Funding and Larry Klaff of Gordon Brothers Funding. These two
market leaders cover much of the market. They described the criteria for
eligibility for Tranche B financing, various structures and projected
the development of Tranche B financing in the future, particularly as a
supplement to senior secured debtor-in-possession financing and as an
alternative to expensive mezzanine financing.
In addition, the committee reported on its continued work on the
formulation of DIP Financing Guidelines by its DIP Subcommittee.
2000 Winter Leadership
Conference
At this year's ABI Winter Leadership Conference, the Finance and
Banking Committee and the Asset Sales Committee held a joint meeting at
which over 60 people attended. The committee hosted two distinguished
panels, which discussed the special problems of liquidating assets using
the internet.
On the first panel, Cory Lipoff of Hilco Trading, David Marchick of
Bid4Assets.com and William Burke of Liquidation.com spoke about the
unique practical challenges and benefits of selling assets on line. The
panel observed from experience that on-line liquidation companies were
well-equipped to efficiently and effectively handle a variety of
transactions, such as claims trading, financial instruments commercial
real estate transactions, and equipment sales, but that they have not
yet been able to solve the number of problems that arise in the on-line
sale of retail goods to consumers. For instance they described how the
logistics and costs of fulfillment and other process management issues
simply do not permit them to generated value much in excess of what a
traditional retail liquidation company might give as "rip" value.
For the second panel. Tracy Sandler of Osler, Hoskin & Harcourt,
and Deborah Grieve of Blaney McMurty addressed recent court decisions
that have considered liquidation sale of customer information and
databases. They discussed the controversies surrounding the sale of
internet company customer lists, privacy information, and related
computer data. Using the Toysmart.com case as a case study, they
illustrated how privacy concerns surrounding these types of assets
complicate and potentially frustrate their sale. Finally, they discussed
issues arising from existing regulations and competing legislation that
has been proposed by Congress to address the privacy issues that arise
with respect to the sale of these types of assets.
I terms of New Committee business, the Finance and Banking Committee
announced that it will be collaborating with Wilmington Trust to develop
content material for "webinar" programs to be broadcast live over
internet to ABI member institutions. The Committee is looking for those
who wish to participate and general material for programs. If you are
interested, you may contact Peter Antoszyk (617) 856-8513 or Steven
Golick (416) 862-6704.
The Asset Sales Committee announced that it would like to present a
program on the ethical issues raised by bankruptcy sales, including
issues presented when the debtor's advisors on sale procedures have
close ties to creditor constituencies. Volunteers/speakers for this
program should contact Richard Tilton at tiltonr@gtlaw.com.
1998 Winter Leadership
Conference
Tom Sommerfield (Business Credit Group, BankBoston NA; Boston),
Warren Feder (Gordon Brothers Capital LLC; New York) and David Weinstein
(Congress Financial Corp.; New York) gave a presentation on the current
availability of credit, particularly in the take-out and asset-based
lending sectors of the industry. It was reported that events in the
Asian economies and U.S. stock market had little effect on the
availability of credit, or the pricing thereof, for these sectors of the
lending industry. Both marketing and sales of these types of loans
remain strong, although recent trends indicate an upturn in the market
for the acquisition of distressed loans. A report from various committee
liaisons was deferred to the committee's meeting at the upcoming Annual
Spring Meeting.
|
