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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
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:

  1. 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
  2. Agreeing that committee work should be done outside of committee meetings
  3. 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"
  4. 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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