Financial Advisors Committee Meeting Minutes
2008 Annual Spring
Meeting
The committee
participated in a four-way joint presentation among the Financial
Advisors, Technology and Telecommunications, Investment Banking and
Asset Sales Committees on the topic “Everything that the
Bankruptcy Professional Needs to Know about Intellectual
Property.” As many financial advisors
have experienced, intellectual property is often not well described, nor
is its value evident. Intellectual property
is a broad term encompassing numerous classes of assets, including
patents, trademarks, trade names, brands, customer lists, etc., all with
their own legal underpinnings and peculiarities. The presentation concentrated on patents, likely the most
prevalent form of intellectual property that we deal with and sometimes
a source of unexpected and significant value.
The committees assembled
a panel of experts to discuss the ins and outs of how to recognize
value, how to realize that value and the elements of the practicalities
of understanding potential actions we can take to maximize our chances
of realizing value for our constituencies. Materials were presented that serve as a basis for
understanding the basics of realizing value from patents and may be
found by clicking here (large
file).
The materials used in the
presentation are the three listings under Technology and
Telecommunications: “Consideration in
Enforcing Patents,” “Selling Patents and Patent Applications
in Bankruptcy Cases” and “The Management and Maximization of
IP.”
The panel consisted
of:
Kevin Anderson (partner, Wiley Rein
LLP; McLean, Va.) Kevin was
plaintiff’s counsel in the highly successful challenge to Research
in Motions patents, a landmark patent litigation, and shared with the
audience the essence of what constitutes damages, the concept of
reasonable royalties and the distinction between patents for so-called
producing and nonproducing entities.
James Wallack (partner, Goulston
& Storrs; Boston). Jim is a veteran
bankruptcy practitioner and has been heavily involved for more than 10
years in the Thinking Machines case, which by itself is a case study in
how to organize the ownership of a patent portfolio, determine value and
realize value at all stages of patent portfolio life.
George Kelakos (Kelakos Advisors,
Stamford, Conn.). George specializes in
intellectual property and brings both a domestic and international view
of the area.
2006 Annual Spring Meeting
On Friday, April 21, during the
ABI’s 24th Annual Spring Meeting in Washington, DC, a joint meeting was held by the
Business Reorganization, Public Companies & Claims Trading, and
Financial Advisors Committees.
The meeting began with an
introduction of the committee co-chairs:
Public Companies & Claims
Trading:
Glenn
Siegel
Dechert
New York, NY
Geoffrey Groshong
Miller Nash LLP
Seattle, WA
Financial
Advisors:
David M. Powlen
Mesirow Financial Consulting, LLC
New York, NY
Rebecca A.
Roof
AlixPartners LLC
New York, NY
Business
Reorganization:
Jo Ann J.
Brighton (New Co- Chair)
Kennedy
Covington Lobdell
& Hickman
Charlotte, NC
Bradley
Sharp
Development Specialists, Inc.
Los
Angeles, CA
It was announced that Bob
Keach of Bernstein, Shur, Sawyer & Nelson, PA in Portland, Maine, co-chair
of the Business Reorganization committee is moving on within the
ABI. Jo Ann Brighton of Kennedy
Covington Lobdell & Hickman L.L.P in Charlotte, NC, will become
the new co-chair of the Business Reorganization
committee.
After the introductions,
the committees attended a panel presentation titled The Power of
Information: Who Gets What and How Can They
Use It? The paneldiscussion focused on
dissemination and control of information during a chapter 11 case. The
panelists were William Weintraub of Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C. in New York, and Daniel Golden of Akin Gump Strauss Hauer & Feld LLP
also from New
York. The panel was moderated by Bradley Sharp of Development
Specialists, Inc. in Los
Angeles, one of the
co-chairs of the Business Reorganization
committee.
The panel discussed a
wide range of issues but focused on the intent of the new code section
1102(b)(3) and its practical implications. The panel essentially agreed that most new cases are looking to
establish communication protocols to limit the sharing of sensitive
information.
The panel also discussed, but
did not reach agreement, on the efficacy of trading walls and the
appropriateness of committee members trading in securities of the
debtor.
The committees would like to
thank the panelists and all in attendance for an interesting and
informative presentation
2004 Winter Leadership
Conference
The committee will be teaming up with International and will put on a
joint program on “The Outlook for Global Insolvencies and
Distressed M & A in 2005 and Beyond,” which will attempt to
provide the audience with a quick whirlwind global tour of what we have
to look forward to in the coming year. Paul Kirk, Managing Director of
PWC's Global Restructuring Services Group, will be the keynote
presenter. Becky Roof and [NAME] will serve as co-moderators of the
program.
2003 Winter Leadership Conference
The Financial Advisors Committee participated with the Investment Banking Committee
in a program entitled "Turf Wars among Restructuring
Professionals—Who's On First?" on Friday morning. Becky Roof and
Claudia Slacik participated as panelists.
A committee meeting was held on Saturday morning. In attendance
were:
Becky Roof, Chairman
Bernie Katz
Matt Christensen
Kimberly Morse
Shal-lee Davidson
Robert Morris
Olin Glenn
Troy Taylor
Matt Pace
Cliff Zuchs
Susan Jacks
Topics discussed included:
- Interest in future program topics, including:
- What is an appropriate business model for a financial advisory firm
in a declining business environment?
- Interest in combining a program with banking & finance
- Agreeing that committee work should be done outside of committee
meetings
- Completing unfinished Committee projects:
- Model retention agreement
- White paper on service differentiation
- Establishing a newsletter
- Establishing a system of emailing to members updates on "hot
topics"
- Developing a pre-filing checklist
2002 Winter Leadership
Conference
II.
Historical Recap
a.
31 Founding Members – Spring 2001
b. Subcommittee
initiates 5 Task Forces – Spring 2001
c.
53+ Members as of Spring 2002
d. 15 Attendees
at Sunday morning meeting in Spring 2002
e.
Elevated from subcommittee within Reorganization Committee to full
committee status - June 2002
f.
ABI President Andy Caine appoints Claudia Slacik [well-known DIP lender
for Citibank New York] as Committee Co-Chair, June 2002
III.
Task Force Developments
a.
Lawyer Education [Pete Pappas - BBK, Task Force Leader]
i. Largest Task Force-
mission: to develop awareness and education programs for the
70-75%-of-ABI bankruptcy lawyer segment
ii. Develops outline of
white paper “Types of Financial Advisors”
iii. Develops full paper
on “Descriptions of the Types of Financial Advisors”
b. Retention
and Best Practices Engagement Agreements (John Tittle – Deloittte
& Touche Dallas, Task Force Leader]
i. Large Task Force
– mission: to build “best practices” pre- and
post-petition agreements for financial advisors, addressing retention
issues, disinterestedness, ethical and practical standards, liability,
payment methodologies and collection, etc.
ii. Task Force studies
more than 20 post-petition Financial Advisor filings, produces 4 related
draft document forms:
1.
Affidavit
2. Notice
of Application
3.
Application
4. Order
of Authorization
iii. Issues raised in
Spring 2002 meeting (still needed to be addressed):
1.
Alternatives to hourly fee basis, e.g. monthly retention, success fee
models
2.
Indemnity provisions
3. Pay
methodologies superior to 120 day, end-of-case treatment
iv. Lengthy draft copies
e-mailed to Committee Members for comment and response – no
response received
c.
Non-Chapter-11 Legal Procedures for Restructuring [Devin Hollands, Task
Force Leader]
i. Mission: develop
understanding and awareness of legal alternatives, e.g. Assignments for
the Benefit of Creditors, Receiverships, Trusteeships, Voluntary
Foreclosure, Liquidating Trusts, etc.
ii. No output
d. ABI
Programming [Tony Schnelling – Bridge Assoc., Task Force
Leader]
i. Mission: To
coordinate our Committee’s input into the programming efforts of
ABI at its 2 national and 17 regional meetings; interface with Education
Committee.
ii. No output
e.
Legislation [Becky Roof – Task Force Leader]
i. Now defunct
IV.
Task Force Agendas Going Forward
i. The heavy work load
on Turnaround Consultants, Financial and Restructuring Advisors, etc.,
which made progress in 2002 challenging, is expected to continue through
2003. We will appoint Co-Leaders for each Task Forces to better share
the load.
ii. Lawyer Education
[Pete Pappas - BBK, Task Force Leader]
1. Tony
Gerbino – new Co-Leader
2. Paper
on “Descriptions of the Types of Financial Advisors” to be
further edited and submitted for publication in ABI Journal
3. A
1-day pre-conference education program for Young Lawyers is in the
planning for the Wash. D.C. Spring Meeting
a.
Andy Caine previously spoke to our Committee, stressing the importance
of Young Lawyer education
b. We are
hopeful of participating in that pre-conference with one or two
panels
c.
Panel on Basic Finance
i. Howard Cohen &
David Mork – co-chairs
ii. Howard has developed
“How to Read a Financial Statement”- used successfully
iii. David has similar
training aides
d. Panel on the
Why/When/How/Who of Bringing in a Financial Advisor
i. Tony Gerbino and
David Mork – co-chairs
e.
Need to be brought into pre-conference planning
4. Future
Program Possibilities
a.
§363 “wash” sales of distressed businesses –
needs coordination with Asset Sales Committee
b. DIP
Financing – easy to develop with Claudia
c.
Need succinct, easy-to-read, mini-pamphlet handout on “Fiduciary
Responsibility of Directors and Officers of Insolvent
Corporations” for Financial Advisors’ use
i. Much material
available, but not condensed enough, simple enough to be usable
ii. David Mork –
INSOL publication
iii. Bob Keach –
brown ABI handbook (“Debtors’ Handbook”?) may have
section
iii. Retention and Best
Practices Engagement Agreements (John Tittle – Deloittte &
Touche Dallas, Task Force Leader]
1. Howard
Cohen – new Co-Leader
2. We
will print these draft agreements, modified for easy comment (margin
annotation, self-mailer envelope, etc.) and distribute to estimated
600-900 financial advisor subset within ABI
a.
Pre-Discussed with Joe Bodoh and John Penn of Publications Committee
b. Comments
returned to John Tittle
c.
Final Draft, incorporating comments and other topics
3.
Coordination with Joe Bodoh- U.S. Trustee
a.
Bob Dangremond and Alex Moglia will contact
b. No permanent
Trustee in Delaware at the moment
c.
Three cases in 3rd Circuit touch on this
d. Need
organized campaign in Trustee’s office
e.
Good contact: Joe Gazinski- right-hand man to the Executive Director
iv. Non-Chapter 11 Legal
Alternatives Task Force
1. New
Task Force Leaders – Alex Moglia, Becky Roof, Geoff Berman
2. Les
Raikow interested in participating
v. ABI Programming
1. Tony
Schnelling now Restructuring Committee Co-Chair
2. New
Task Force Co-Leaders: Becky Roof, Dan Dooley
V.
Other Business
a.
Howard Cohen seeking information regarding Receiverships in Europe and
the Far East
b. Need
coordination with the International Committee
2001 Winter Leadership
Conference
Our Financial Advisors Subcommittee meeting at the ABI Winter
Leadership Conference 2001 (La Costa) attracted 21 participants,
including 6 new members and several ABI leaders. This was a healthy,
roundtable discussion of the progress of our various Task Forces as well
as continuing dialogue regarding our potential role within the ABI
framework.
This has been an extraordinarily busy year for those of us in
turnaround consulting and restructuring. As a result,Ýour Task
Forces generally made less progress than originally anticipated.
Everyone remains optimistic that, in the long run, we can and will make
a significant contribution toÝABI.
Non-Chapter 11 Legal Procedures for Restructuring [Devin
Hollands, Task Force Leader]
This Task Force develops an understanding and awareness of
alternative mechanisms, e.g. Assignments for the Benefit of Creditors,
Receiverships, Trusteeships, etc. Les Raikow participated in a June 2001
AIRA panel on ABCs; Geoff Berman has participated in a number of these
panels.ÝÝA panel on ABCs could be an effective "road show" for
our Subcommittee for both national and regional ABI meetings, and will
be explored.
Legislation [Becky Roof, Task Force Leader]
This group is organized to provide our input to the Legislation
Committee and the ABI legislative effort, providing the Financial
Advisor's business (rather than legal) evaluation of the practicality
and impact of potential changes in bankruptcy law.
Bettina Whyte noted that there was little need for this Task Force at
this point in time, and suggested that this Task Force be suspended.
Becky, Bettina, Dion Hayes and Jim Smith should contact me regarding
their preferences for an alternative Task Force assignment.
Retention/Best Practices Agreements [John Tittle, Task Force
Leader]
This group is chartered to provide analysis, evaluation and "best
practices" on engagement agreements for Financial Advisors, both
pre-petition and particularly post-petition. Issues to be addressed
include retention, disinteredness criteria, ethical and practical
standards.
Dave Bart is in the process of completing a draft compilation of
Retention Agreements from information gathered by the Task
Force.ÝÝThe Task Force has elected to begin with Retention
Agreements used in bankruptcy filings (subject to Trustee scrutiny)
rather than pre-petition Financial Advisory Services agreements... and
obtained these from publicly available records. We will issue the draft
compilation when available.
Education: ABI Programming [Tony Schnelling, Task Force
Leader]
OurÝpurpose is to provide our input into the programming efforts
of ABI in its 2 annual national meetings and 17 regional meetings.
WeÝwill develop programming content and interface with the
Education Committee.
Tony Schnelling suggestedÝsome overlap between his group and the
Education: Lawyers Task Force, and intend to work with them to create
standard programs for education. This group will interface with
theÝeducation leadership in ABI, and with sufficient lead time
before meetings,Ýwork to become part of panel-building as well as
suggesting new panels. They intend to survey our Subcommittee membership
for ideas. They expect to issue a "white paper" no later than April
2002, and hopefully before the ABI Washington DC meeting.
Education: Lawyers [Pete Pappas, Task Force Leader]
This group seeks to develop awareness and education
forÝbankruptcy attorneys (75% of ABI membership), including
financial basics, and the when/why/how to retain and work with Financial
Advisors.
Pete's Task Force elected, as their first undertaking, to develop a
"white paper" to explain the different kinds of financial advisory
services available to the bankruptcy community. A first draft is
available here as a self-explanatory file attachment. Please submit your
revisions, thoughtsÝand suggestions back to Pete.
A Task Force for Canadian Financial Advisors?
Mel Zwaig, who brought two of his people to the meeting (Ed Scheck
and Bob Cumming), brought up the possibility of a Task Force dealing
with the somewhat difference Financial Advisory practices in Canada. Mel
will study the feasibility of this idea and get back to us.
Encouragement and Thoughts from ABI Leadership
Our meeting was attended by ABI leaders, including Andy Caine, Reggie
Jackson and John Penn. Andy expressed the thought we could make a
presentation available to the membership either through obtaining a slot
in the regular program (next Spring is locked up, but we could plan
toward next mid-Winter) or by making a presentation within our allocated
subcommittee time period. We talked about education on the "basics" of
our advisory work for young lawyers. We were encouraged by John to
consider papers and articles for the ABI Journal. We are appreciative of
the interest in our subcommittee's work.
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