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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Thursday, February 1, 2024

  • 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.

$297.00
CLE
ALL

This CLE course will guide commercial lenders and their counsel on confronting a defaulted or troubled loan. The panel will discuss workout options and outline steps for lenders when anticipating a borrower's potential bankruptcy.

Faculty

Brian J. Koenig
Shareholder
Koley Jessen PC LLO

In his commercial bankruptcy and financially-distressed transactions practice, Mr. Koenig counsels a variety of clients including creditors, debtors, bankruptcy trustees, creditor committees, and post-bankruptcy investors, to help them evaluate risks, minimize their exposure, maximize their recoveries, structure transactions, and cost-effectively resolve issues. His experience includes: formulating strategies to assist banks and companies dealing with financially-distressed and bankrupt customers to maximize their recoveries; negotiating out-of-court workout and forbearance agreements; counseling creditors, debtors, and investors in commercial transactions and foreclosures, including mortgage foreclosure proceedings, strict foreclosure actions, and UCC sales; and litigating matters in state and federal courts, including actions under guaranties, replevin actions, avoidance actions, objections to discharge, dischargeability actions, preference claims, subordination claims, and equitable recharacterization claims, among others.

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Lisa A. Holl Chang
Attorney
Mayer Brown LLP

Ms. Holl Chang advises clients in out-of-court restructurings, workouts and liability management transactions, Chapter 11 proceedings, enforcement actions, cross-border restructurings, and other reorganization proceedings. Her expertise includes intercreditor issues that arise in debt financing transactions and reorganizations, such as first/second lien loans, split-lien financings, mezzanine financings, unitranche structures and subordination agreements. Ms. Holl Chang regularly represents a wide variety of commercial banks, agent banks and lending syndicates, private credit lenders and other alternative credit providers, companies, indenture trustees and other parties-in-interest in all types of distressed situations.

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Description

The first indications of distress occur long before a company files for bankruptcy or even starts considering “strategic alternatives.” To maximize the recovery of distressed loans, lenders must get ahead of the curve by evaluating outstanding loans for the first sign of trouble and preparing pre-bankruptcy tactics to protect the lender's rights and interests.

Each borrower's circumstances are unique, so lenders can't formulate a uniform recovery strategy with all borrowers but our panel will review and discuss best practices for loan workouts when a potential bankruptcy looms.

Listen as our panel of finance attorneys explains steps commercial lenders should take when confronting a troubled loan and effective pre-bankruptcy planning strategies.

Outline

  1. Triage for financially distressed companies: a secured lender's perspective
    1. Examine documentation and collateral perfection
    2. Audit inventory, accounts receivable, and equipment to determine borrowing base issues
    3. Review cash flow budgets and projections at least monthly
    4. Head in the sand
    5. Retention of experienced workout consultants
  2. Documenting a workout solution
    1. Obtain guarantees, letters of credit, other credit support
    2. Forbearance agreements
    3. Reservation of rights
    4. Resolving preference issues
  3. Pre-bankruptcy strategies
    1. Collateral sales options
    2. Alternatives of a debtor
    3. Actions in workouts that lead to potential preference issues
    4. Tight drafting of intercreditor agreements and agreements among lenders for enforcement in bankruptcy cases
    5. Relaxing financial covenants
    6. Avoiding "course of dealing" issues

Benefits

The panel will review these and other key issues:

  • What are a lender's options when dealing with a commercial borrower on the verge of default?
  • What are some strategies and tactics lenders may employ pre-bankruptcy to maximize their recovery?
  • How can lenders minimize liability concerns stemming from "course of dealing" issues?