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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Wednesday, March 2, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$297.00

This course is $0 with these passes:

CLE
ALL

This CLE course will discuss how counsel representing committee members and counsel for committees address recurring and new issues. Official committees, most often unsecured creditors committees, remain critical to reigning in secured lenders. Ad hoc committees provide creditor groups that share a common agenda with a streamlined, cost-effective, and unified voice. The panel will guide counsel for these groups and their members in maximizing distribution.

Faculty

Stephen B. Selbst
Partner
Herrick, Feinstein LLP

Mr. Selbst is the co-chair of Herrick's Restructuring & Finance Litigation Department. He has more than 30 years of experience representing debtors, creditors, official committees, distressed investors and asset purchasers in bankruptcies and out-of-court restructurings. He is a frequent lecturer on bankruptcy and restructuring topics and has published articles and book chapters on bankruptcy-related topics. He has been frequently quoted in newspaper articles on insolvency related topics and has appeared on CNBC.

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Steven B. Smith
Partner
Herrick, Feinstein LLP

Mr. Smith focuses his practice on complex corporate restructuring and creditors' rights, including in court Chapter 11 cases and out-of-court workouts. He represents official and ad-hoc creditor committees, secured lenders, administrative agents, and other parties-in-interest in restructuring matters. Mr. Smith is experienced in analysis of true sale, non-consolidation and bankruptcy remoteness principles.

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Description

Bankruptcy committees are in the news after a member of the unsecured creditors' committee in the Neiman Marcus bankruptcy was arrested for fraud, extortion, and obstruction of justice based on his audacious conduct in the case. Such incidents are rare, and committees remain an essential player in reorganizations.

Official committees carry significant clout with the court and keep secured lenders from excluding and marginalizing unsecured creditors. Committees can prevent overreaching and unnecessary "adequate protection" in DIP, and cash collateral orders, undervaluation of assets, the use of independent directors, and can curb self-serving rights offerings. Committees have even developed and won workarounds to the issues created in CML V L.L.C. v. Bax, limiting claims against the debtor's insiders, officers, and directors.

Ad hoc committees can be essential in protecting minority creditor groups' interests and bringing perspective on unusual issues. All committees actively oppose management bonuses and pre-petition cash payouts that do not benefit the bankruptcy estate.

Committees work best when thoughtfully and strategically formed, focused, and directed. Counsel for individual members and the committee's counsel play a critical role in how well the committee performs as well as increasing distribution.

Listen as this experienced panel of attorneys who have represented and litigated on behalf of committee members and committees discusses best strategies for bankruptcy committees and what committees can do for creditors not serving.

Outline

  1. Overview of committees, duties, pros and cons, formalities
  2. Composition of official committees
    1. Solicitation of members by possible committee counsel
    2. Potential sources of conflicts
    3. Selecting counsel for the committee
  3. Strategies for unsecured creditors committees to maximize distribution
    1. DIP/cash collateral orders/506(c)/552
    2. Pre-petition bonuses and payouts
    3. Claims against insiders
    4. Ensuring adequate disclosure
    5. Rights offering and backstop fees
  4. Strategies for ad hoc committees
    1. Conflicts
    2. Attorney-client privilege

Benefits

The panel will review these and other key issues:

  • What are committee members' statutory authority and duties under Sections 1102 and 1103 of the Bankruptcy Code?
  • Are there limits to a committee's standing to pursue claims against third parties?
  • On what significant legal matters are committees most influential?
  • What plan provisions should concern the committee most?
  • How is committee counsel chosen?
  • How can counsel corral rogue or burdensome members?