Even the smallest chapter 11 reorganizations are complex, with many process handoffs, transactions and communication touchpoints. For cases with substantial or volatile creditor populations, the selection of a claims agent capable of helping a debtor company emerge from chapter 11 successfully can be critical.
Claims agent services vary from basic administrative work, such as noticing and validating proofs of claims, to other projects including building online claims forms and creditor portals, and highly complex financial balloting and solicitation work. The ultimate goal of a good claims agent should be to streamline the bar date process and reduce administrative overhead for the debtor company. The best claims agents have developed reputations for serving as invaluable assets to debtors’ restructuring teams by developing solutions to process challenges. In selecting a claims agent, it is important not to overlook the basic services provided. Below are the general key factors to consider when choosing a claims agent.
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by Robert J. Keach
Bernstein Shur; Portland, Maine
The relatively recent decisions of the Third and Fifth Circuits in Philadelphia Newspapers  and Pacific Lumber,  with respect to the rights of creditors to credit-bid in a sale of assets under a reorganization plan, uprooted the expectations of secured lenders who had come to expect that in the case of a proposed plan effecting a sale of assets free and clear of liens, they would have the ability to credit-bid. In light of the holdings in these two cases, creditors faced the possibility that a debtor can confirm a cramdown plan proposing a sale of assets free and clear of liens by merely providing the impaired creditor with the “indubitable equivalent” of its claim, but denying an opportunity to credit-bid. The extent to which other circuits would adopt the Philadelphia Newspapers holding remained to be seen. Now, at least one circuit—the Seventh Circuit in River Road —has rejected the so-called “plain meaning” construction of § 1129(b)(2)(A) articulated by the majority in Philadelphia Newspapers, instead embracing the Philadelphia Newspapers dissent. This article examines these recent case law developments in the world of credit bidding in plan sales, particularly the Philadelphia Newspapers and River Road cases, and these cases’ differing statutory interpretations.
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On July 6, 2011, the FDIC issued a final rule implementing certain orderly liquidation authority provisions of the Dodd-Frank Act. Under Dodd-Frank, the FDIC may serve as receiver for a financial company if the failure of the company and its liquidation under the Bankruptcy Code or other insolvency procedures would pose a significant risk to the financial stability of the US.
The final rule is intended to provide greater clarity on the FDIC's powers as receiver and how the claims process under the FDIC's orderly liquidation authority will work. It follows a January 2011 interim final rule covering the payment of similarly situated creditors and the honoring of personal services contracts and a March 2011 proposed rule covering living wills, clawback of executive compensation, priority of claims and other related matters. The final rule largely coincides with the interim final rule and the proposed rule but contains several key differences.
Read the full final rule.
The panelists for "Referees between Thieves? In Pari Delicto and Insurance Coverage Issues" discussed the deepening insolvency theory, discretionary jurisdiction, fiduciary duties and gave attendees a detailed summary of related cases. Jeffrey W. Kelley of Troutman Sanders LLP in Atlanta and Jerry M. Markowitz of Markowitz, Ringel, Trusty & Hartog of Miami moderated the session. Panelists included Kevin G. Hroblak of Whiteford, Taylor & Preston LLP in Baltimore, Soneet R. Kapila of Kapila & Company in Ft. Lauderdale, Florida and John C. "Kit" Weitnauer of Alston & Bird, LLP in Atlanta. Click here for "Referees between Thieves? In Pari Delicto and Insurance Coverage Issues" educational materials.
"Business Update 2011" covered topics such as the absolute priority rule and issues that arise under § 365. Speakers also provided attendees with the court opinion for a variety of cases; some examples include In re Bryant Manor, LLC and In re Tousa, Inc. The session was moderated by the Hon. Mary Grace Diehl of the U.S. Bankruptcy Court for the Northern District of Georgia in Atlanta. Panelists included the Hon. David W. Houston, III of the U.S. Bankruptcy Court for the Northern District of Mississippi in Alberdeen and Prof. Margaret Howard of Washington & Lee University School of Law in Lexington, Va. Click here for "Business Update 2011" educational materials.
Panelists for the session titled, "Examiners: Their Use, Misuse and Creative Applications," provided attendees with information on topics such as duties of the examiner, the differences between an examiner and a chapter 11 trustee, the appointment process, witness interviews and retention issues. The session was facilitated by Valerie P. Morrison of Wiley Rein LLP in McLean, Va. Panelists included Don A. Beskrone of Ashby & Geddes, PA in Wilmington, Del., the Hon. Jeffrey A. Deller of the U.S. Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh, Ramona D. Elliott of the Executive Office for the U.S. Trustees in Washington D.C. and Mark Minuti of Saul Ewing LLP in Wilmington, Del. Click here for "Examiners: Their Use, Misuse and Creative Applications" educational materials.
Don't forget to check back to the Business Reorganization Committee page regularly for more conference educational materials, past newsletters and the latest announcements.