Small businesses are suffering in this economic downturn; however, the practical and economic realities often make Chapter 11 relief problematic. Smaller companies often cannot afford the retainer necessary to engage experienced bankruptcy counsel, and the cumulative weight of administrative fees can impair the ability to reorganize. Proprietors of small businesses often have less sophistication and fewer resources at their disposal than executive and managers of larger companies. This program will explore the difficulties in representing small businesses facing financial problems: whether to file for Chapter 11; managing the small Chapter 11 case (including discussion of the “small business debtor” provisions enacted in BAPCPA); workout or restructuring alternatives for small businesses; potential tax issues; and conflict issues for counsel.

With residential real estate values falling through the floor and lenders tightening standards, commercial real estate is not far behind. We can expect another wave of distressed single asset real estate entities much like that encountered in the early 90’s. However, the question now, particularly in light of the current credit crunch, is will these entities make it into Chapter 11 or merely suffer foreclosure, deeds in lieu, or a quick Chapter 7? This panel will explore SARE case under the BAPCPA amendments; obtaining relief from stay or dismissal; viability of 363 sales in SARE (including the ramifications of Clear Channel Outdoor, LLC v. Knupfer (In re PW, LLC), 391 B.R. 25 (9th Cir. B.A.P. 2008) and Fla. Dept. of Revenue v. Piccadilly Cafeterias Inc., 128 S.Ct. 2326 (2008)); viability of boot strap plans in Chapter 11 SARE cases (including current status of classification, 1111(b) elections, cramdown, and absolute priority rule issues); issues for the Chapter 7 Trustee; tax issues; and other issues affecting real estate entities and lenders in out of court workouts and foreclosures.

U.S. economy may or may not be mired in the worst recession in history. It is clear, however, that the recent global economic turmoil has affected our industries, institutions, and—perhaps—our fundamental economic behavior. What does this all mean for the restructuring industry and the ability to save faltering businesses? The panel will discuss the “credit crunch,” the provision of bail-outs to certain businesses in certain industries, and waning consumer confidence, and how all of those factors may have altered the ability to restructure a company, thereby preserving value and, often, much-needed jobs. The panel will examine whether these and other factors may foreshadow a more permanent shift in the restructuring industry toward liquidations. The panel will also explore the alternative financing options for companies that cannot obtain capital in the traditional debt or equity markets.

Representation of parties in insolvency cases presents a number of ethical issues that, while not unique to debtor representation, tend to be magnified in that arena. The desperation that clients feel may exacerbate tensions between the client and other parties, and even between the client and counsel. The positions which counsel may be pressured to take will often butt the attorney right up against the strictures of applicable ethical rules. To make things more tenuous for counsel, some federal courts, including in New England, have recently sought to discipline attorneys directly without resorting to referrals to state licensure authorities. Examples abound.

• Clients may insist that counsel take positions which:
  - Counsel believes may be frivolous or which may annoy the court (perhaps based on prior
  rulings of the court in other cases), or as to which supporting evidence is weak;
  - Counsel feels will undermine counsel’s credibility with the court in future cases;
  - Counsel feels may undermine counsel’s relationship with clients in other cases, or will
  negatively impact existing clients in other cases;
  - Are intended only to delay the inevitable negative result;
  - Are intended to destroy the opposing side, either to make an example, or to gain competitive
  advantage,
  - Will vindicate, at least morally, the position of the client, by means of, for example,
  hyper-aggressiveness beyond what is strictly required to affect the outcome on the merits


• Counsel may volunteer to “hold” a larger than usual retainer, in order to make attachment by trustee process more difficult
• Counsel may seek payment of a retainer without regard to the source of payment, or whether the funds were subject to a security interest
• Counsel may be asked to address, or may observe on his or her own, issues relating to possible liability of entities other than the client, particularly directors and officers
  - Possible D&O Claims
  - Wage claims, including corporate credit card liability
  - Trust fund withholding issues


• Counsel may decide to assist in creating vehicles for exempting, or otherwise making unavailable, assets from the reach of creditors
• Plaintiff’s counsel may wish to forum shop based on the willingness of a court to grant pre-judgment relief.

Applicable ethical rules require that a lawyer represent a client zealously within the bounds of the law. Although past programs have explored the ethical issues concerning conflicts of interest, this program is designed to explore the many other ethical issues that arise in the context of insolvency cases.

Cases are decided on the basis of law and the facts. And the facts are only what is in evidence. This interactive program will help bankruptcy practitioners strengthen their skills for getting evidence in and keeping it out. The program will address qualifying and challenging expert testimony, the use of judicial notice to streamline an evidentiary presentation and evidentiary considerations in the summary judgment process. The program also will cover the most commonly encountered evidentiary issues in a bankruptcy case, including the Hearsay Rule and various exceptions to that Rule, such as the Business Records exception. New Rule 502 of the Federal Rules of Evidence also will be discussed.

In a worsening economy, lenders can expect increased insistences of fraud. This program will identify common types of borrower fraud, and what lenders can do to guard against them. A variety of panelists (lawyers, bankers, consultants) will describe the various actions that can and should be taken when fraud is suspected or discovered. They will also discuss the ramifications of (pre- and post-filing) fraud in bankruptcy cases.

This panel will explore techniques for preserving client assets in bankruptcy, including the effective use of bankruptcy exemptions and the use of domestic and offshore “asset protection” trusts to shield assets from creditors’ claims. The panel will also closely examine the risk of fraudulent transfer and turnover attacks on asset protection transfers with a special emphasis on the new ten year lookback period for asset protection transfers effected by BAPCPA. Finally, the panel will address the ethical issues that confront lawyers and other professionals who facilitate asset protection transfers.

Press reports suggest that as many as 20% of hedge funds will be liquidated in the near future due to the financial crisis. What impact will this have on clients who have borrowed or been invested in by hedge funds? What impact will this have on clients who have invested in hedge funds, i.e., how do they seek recovery on their investments? How will fraud involving a hedge fund affect its investors? What type of issues will be raised in hedge fund restructurings or bankruptcies? A panel of experts will discuss these and other issues that practitioners are likely to encounter in this next wave of cases.

This panel will discuss the wave of retail and restaurant bankruptcies that has already started and is likely to continue. While many of the retail cases are national “mega-cases,” many of the issues in those cases will arise in small retail and restaurant cases as well. Issues to be addressed include (i) the liquidation of inventory collateral and the interplay between the Bankruptcy Code and nonbankruptcy laws regarding GOB sales; (ii) lease dispositions and designation rights transactions; and (iii) the treatment of employee and consumer claims in these cases.

A discussion of different tactics available to trade creditors in a Chapter 11 case, including identification and utilization of leverage, permissible activity in the shadow of the automatic stay, section 503(b)(9) claims, reclamation and stoppage in transit.

In a new format for the Northeast Conference, our plenary Sunday session features a relaxed "roundtable" forum: tables of ten, with one judge per table. The judges will lead informal and in-depth discussions of topics selected in part from ideas and suggestions received from Conference registrants. Please send your suggestions for discussion topics to the moderator at bharwood@sheehan.com when you register for the Conference, and join us on Sunday morning for this exciting opportunity to discuss and share ideas with the judges and your colleagues!