ABF Journal, June 2006
June 2006

Distressed Fund Managers Say 
Preparartion is the Key

Hi-Tech Inventory Evaluations —

Understanding Technological & Economic Obsolescence
By Paul Smith, Emerald Technology Valuations, LLC

Does hi-tech inventory make asset-based lenders nervous? not to worry — when lenders use appraisals that properly consider underlying obsolescence factors and establish the necessary monitoring steps needed, high-technology inventories can provide an excellent source of collateral. (Ref # APP030)

Parties to Second Lien Financing —
Will Their Expectations be Met in a Workout?
By Paul H. Shur, Reed Smith LLP

The past few years have seen the emergence of multi-tiered debt governed by highly negotiated and complex documents. Paul Shur of Reed Smith explores what today’s lenders might expect on the other end of workouts and litigation after the Courts scrutinize such transactions. (Ref # LGL057)

Fallacies, Flaws & Myths — What You Don’t Know About Your Borrower’s Insurance Program Can Hurt You
By William J. McNamara, Commercial Insurance Consultants, Inc.

While debating what constitutes enforceable insurance documentation, lenders have accepted “certificates” of insurance as proof of coverage. Turn to page 14 to discover why this practice can put lenders in a vulnerable position. (Ref # INS012)

The Next Wave: Distressed Funds Scan the Horizon
By Thomas D. Hays, III, and Roseanne Sweeney, NachmanHaysBrownstein, Inc.

Last fall, turnaround specialists at nachmanHaysbrownstein discussed “the next wave” of credit issues with traditional Abls. This time around, they return with a conversation with several nontraditional lenders — distressed fund managers. (Ref # IND077)


Basic Instincts — Effective Field Exams

Require Thinking Outside the Boxes
By Brian Smith, Lenders Consulting Group, Inc.
While technology has impacted and streamlined the field exam process, many of the qualities of a good field examiner have not changed. Good instincts and the ability to identify problem indicators within masses of information are always the most important tools of the trade.
(Ref # FIELD011)

Make No Mistake, It’s Not the 51st State…Appreciating the Differences of Financing in Canada

By Keith Hughes and Michael Carsella, LaSalle Business CreditFinancing middle-market companies in Canada may seem somewhat similar to U.S. deals, but there are crucial differences that should only be ignored at a lender’s peril. Keith Hughes and michael Carsella of Abn Amro-LaSalle business Credit expound on some of the intricacies of financing Canadian companies.
(Ref # INTL029)

More on Lean Manufacturing… What’s Your Setup Time?
By Barrier Advisors, L.P.

Setups are one of the primary banes of any process, especially manufacturing. This is not because the setups themselves are unnecessary or inefficient, but the way traditional American manufacturers deal with the setups is inherently unhealthy and unprofitable.
(Ref # TM053)

Despite Adversity, IFA Conference Hits the Mark
By Gerald F. Parrotto, Publisher

We at ABF Journal were delighted when our publisher agreed to attend this year’s annual IFA conference in Cancun. We were even more delighted when he returned with glowing reviews. read on to find out how the IFA “hit the mark” in spite of a series of adverse circumstances beginning with Hurricane Wilma. (Ref # FAC054)

Professional Malpractice & Negligent Misrepresentation: Can a Careful Lender Protect Itself From its ‘Friends’ in the Absence of Contract?
By Jeffrey G. Close, Chapman and Cutler LLP

What happens when the lender makes a $10 million loan on the basis of a $14,000 appraisal paid for by the borrower and it winds up being wrong? When something goes wrong, how can a lender protect itself in the absence of a contract? This month’s legal eyes column addresses these and other concerns. (Ref # LGL058)