ABI is pleased to announce your 2008-2009 co-chairs, as well as the addition of five new leadership positions. These new positions are a result of your feedback regarding opportunities for involvement and advancement in the association.
Co-Chairs: Weston Anson
Gary S. Jacobson
Education Director: Don D. Grubman
Listserve Moderator: Henry Jefferson LeForce
Membership Relations Director: Greg R. Yates
Newsletter Editor: John H. Maddock, III
Special Projects/Task Force Leaders: Daryl Martin
Bradford J. Sandler
Click here for contact informaton on your committee leaders.
Written by: Jason Binford
Haynes and Boone, LLP;
Part I of this four-part series discussed, in general terms, the prohibition of collusion in bankruptcy sales under section 363(n) of the Bankruptcy Code. Part II discussed the fine line separating permissible collaboration from impermissible collusion. In this third part another fine line will be explored: the line between agreements that control the sales price at an auction, and agreements that only affect the sales price. As in Parts I and II, the discussion generally is from the point of view of a prospective bidder and addresses the knowledge such a bidder should have to avoid liability under § 363(n). Part IV will discuss the finality of sale orders, i.e., the time period within which a party must bring a § 363(n) action. That discussion will generally be from the point of view of a § 363(n) plaintiff. Therefore, while the information provided in Parts I through III is helpful to both § 363(n) plaintiffs and defendants, stay tuned for Part IV if you are looking for a roadmap of how to hold a suspected colluder accountable under the Bankruptcy Code.
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Written by: Shawn Fox
McGuireWoods LLP; New York
The sale of all or substantially all of the assets of a business pursuant to §363 (363 sale) of the Code in a chapter 11 case has become more commonplace in recent years as acquirors seek to purchase target businesses in an accelerated manner while shedding many of those businesses’ liabilities. This strategic choice often involves the asset purchase agreement (APA) and the 363 sale procedures for conducting the auction sale (bidding procedures) being negotiated prior to the commencement of the target company’s chapter 11 case. These negotiations take place most often among the debtor, the secured creditors and the initial proposed acquirer. In cases where the debtor has leveraged its assets in excess of its value, however, the debtor may play less active role in the negotiation of the APA. The initial proposed acquirer is usually referred to as the stalking-horse bidder and its bid called the “stalking-horse bid.” The stalking-horse bid usually sets the floor valuation for the business that is to be sold pursuant to the 363 sale.
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Written by: Gabe Fried
Streambank LLC; Needham, Mass.
Intangible assets have been among the last class of assets to garner respect in bankruptcy proceedings. Until recently, trademarks, patents and know-how have withered on the vine as bankruptcy professionals (financial advisors, restructuring professionals and attorneys) have focused on other areas to maximize value and achieve a timely outcome. Now that intangibles are starting to gain more attention, professionals may wish to revisit the traditional asset sale process. When attempting to maximize value from assets in a bankruptcy, the short and certain path of an auction often trumps other disposition methods. This is due in large part because of the perceived opportunity and carrying costs associated with a long sale process. However, IP assets enjoy some unique characteristics for which an alternative disposition approach will often yield substantially higher value than a quick auction.
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The Annual Spring Meeting, held April 3-6, 2008, attracted more than 1,100 insolvency professionals from around the world. The conference featured some excellent educational sessions in addition to featured speakers Justice Samuel A. Alito Jr. and Senator Sheldon Whitehouse (D-R.I.).
Below is the article "Taking the Success Out of Successor Liability," written by Lawrence A. Katz of Venable LLP, in Vienna, VA, which was included in the materials for the session “363 Sales: How Free Is Free & Clear? Do New Case Law, Fraud In The Process Or Loan-To-Own (Or Loan To Buy) Deals And Other Recent Trends Negate The Ability To Get A §363(M) Order And/Or Impact Successor-Liability Exposure?" The session was a joint effort of the Business Reorganization Committee and the Commercial Fraud Task Force Committee.
Read the full article, "Taking the Success Out of Successor Liability."
Submit Articles for the ABI Asset Sales Committee Newsletter
Article submissions are always welcome and are a great way to get involved in the ABI when you don’t have time to draft an in-depth lengthy article. Short articles (about 1,200 words) can survey the law nationally or locally, discuss relevant asset sale issues or examine a specific case. If you are interested in writing, contact Newsletter Editor John Maddock at email@example.com.The next deadline is Aug. 26, 2008.