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March 2011

Bankruptcy Issue
Vol. 9 No. 2
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FEATURES

After an Inconsistent Start, ABLs See Dramatic Jump in Q4 Pipeline … Aggressive Behavior Ahead - Lenders concede that in 2010, not only was liquidity resoundingly back, making everyone itchy to put money to work, but more noteworthy, lenders could look back over the last two years and confirm that their portfolios had made it through the credit crisis relatively unscathed. In turn, deal structures became more aggressive as lenders sought to grow their books.
Beyond Bankruptcy … You’re Emerged … Now what? - The process of successfully guiding a company out of bankruptcy is not an easy task. It takes a strong team of players, a clever plan of action and a dogged commitment of stakeholders to make it happen. Once a company emerges, it does not mean it is out of the woods. Therefore, stakeholders should leverage the skills developed, plans constructed and relationships formed through the next phase of the cycle.
Back in Business: After a Rash of Bankruptcies, Retailers Are in Fighting Shape for 2011 - Given what Spence Mehl calls “a bloodbath of bankruptcies” in the retail space in 2008 and 2009, last year brought surprisingly fewer bankruptcies than most had anticipated. And while bankruptcy still loomed heavily for nearly all the big chains in 2010, the difference was that retailers themselves executed their own top-to-bottom restructuring plans. But, Mehl warns, retailers aren’t out of the woods yet.

COMPANY/EXECUTIVE PROFILE

SJC Fund Manager Fills a Void While Keeping Everything in Perspective - Shakespeare once asked, “What’s in a name?” For Steve Czech, founder and portfolio manager of FrontPoint Partners’ SJC Direct Lending Fund, it means a great deal. The $1 billion-plus hedge fund provides privately negotiated senior loans to middle-market companies and is staffed by five experienced professionals. Moreover, it provides Czech with an opportunity to pursue a very important mission.

FROM ALL FACETS

TURNAROUND CORNER

Frankly Speaking … Bankruptcy Attorneys Can Help Persuade Clients to make Tough Decisions - Distressed companies and their general counsel often don’t realize what kind of help they really need. The more corporate leaders and their counsel understand the benefits of enlisting bankruptcy attorneys early in the process, the better chance that they will take essential and timely actions to get the company back on track. In the end, forcing a frank conversation about a company’s trouble, coupled with bringing in bankruptcy counsel, is the right thing to do.

FACTORING FOCUS

Postcard From the Future: This Year, Factors to Flock to a ‘Capital’ Location - As has been their custom for the past 17 years, factors worldwide are scheduled to congregate in the early spring — this time descending up the nation’s capital on April 13-16 at the Omni Shoreham. With more than cherry blossoms in their minds, these professionals look forward to the educational and networking opportunities the International Factoring Association’s main event has to offer.

BANKRUPTCY UPDATE

Secret Extensions — Preference Actions Avoiding the Statute of Limitations - While it is rare that one sees issues regarding the two-year statute of limitations for the commencement of preference actions, such issues can wreak havoc in larger, more complex chapter 11 reorganizations where a plan of reorganization has yet to be confirmed prior to the running of the two-year anniversary of the case.

LEGAL EYES

What Defines a Security Interest? Looking Outside the Comfortable Confines of Article 9 - In Ken Weinberg’s estimation, Article 9 of the Uniform Commercial Code is an extremely thoughtful and thorough statute. But, he warns, it’s not the end all, be all of security interests, and it is therefore prudent to visit what is and what isn’t covered by Article 9’s broad scope.

FINALCUT 

FinalCut: Former CitiCapital/GE Capital Exec Receives Ten-Year Sentence - A former executive with both CitiCapital and GE Capital faces up to 20 years in federal prison for his role in orchestrating a Ponzi scheme that included obtaining more than $12.5 million from GE Capital for fictitious equipment sales.

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