Sheppard's Restructure THIS!

Sheppard Mullin's Restructure THIS! podcast explores the latest trends and controversies in Chapter 11 bankruptcy, commercial insolvency, and distressed investing. For this episode, Ralph Brubaker, the James H.M. Sprayregen Professor of Law at the University of Illinois College of Law, joins us to discuss the use of non-consensual third-party releases in bankruptcy proceedings. Professor Brubaker holds four degrees from the University of Illinois, including his J.D. summa cum laude and an M.B.A. He was on the faculty of Emory University School of Law in Atlanta, Georgia, from 1995 until 2004, when he returned to his alma mater. Professor Brubaker served as Interim Dean of the College of Law from 2008-09 after serving as Associate Dean of Student Affairs the previous two years.

Considered one of the leading bankruptcy scholars of his generation, Professor Brubaker is the Editor-in-Chief and a contributing author for West's Bankruptcy Law Letter. He is also co-author of a bankruptcy casebook and has written dozens of journal articles and essays. In his most recent article, "Mandatory Aggregation of Mass Tort Litigation in Bankruptcy," published last month in the Yale Law Journal Forum, Professor Brubaker addressed the inequities of non-consensual third-party releases used in bankruptcy proceedings and argued for their prohibition.

What We Discussed in This Episode:

• What are non-consensual third-party releases as they relate to bankruptcy proceedings?
• Why are these types of releases controversial?
• Should these types of releases be prohibited rather than reformed?
• Are there third-party releases that should be permitted in Chapter 11 plans?
• Why aren't claimant opt-out mechanisms a sufficient indicator of consent?
• Is there a critical mass of consent that could bind a non-consenting minority?
• Does the population of claimants subject to non-consensual third-party releases matter?
• Could prohibiting these releases impair the efficient resolution of the bankruptcy and reorganization process?

Resources Mentioned:

Mandatory Aggregation of Mass Tort Litigation in Bankruptcy

Contact Information:

Professor Ralph Brubaker

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

Sheppard Mullin's Restructure THIS! podcast explores the latest trends and controversies in Chapter 11 bankruptcy, commercial insolvency and distressed investing. In this episode, we're joined by Stacey Rosenberg, partner in the Finance & Bankruptcy Group in Sheppard Mullin's Los Angeles office. We discuss the rise of direct lending and private finance, current trends in middle-market loans, predictions for whether the overall volume will drive restructuring activity in the near future and the role of private debt financing in the motion picture and entertainment industry.

Stacey joined Sheppard Mullin a little over a year ago, and has been representing lenders, borrowers and equity sponsors in a variety of debt finance transactions for more than 25 years. While her practice in recent years has primarily focused on private lending, Stacey's expertise and experience includes senior secured credit facilities, leveraged buyouts, workouts and out-of-court restructurings, exit financings and secured bond transactions.

Her in-depth experience and transactional knowledge, combined with a unique focus in the entertainment industry, allows Stacey to provide clients with highly specialized advice in connection with credit facilities, film securitizations, motion picture co-production and distribution arrangements and sale transactions.

What We Discussed in This Episode:

• What are some of the most interesting trends we are seeing in middle-market and direct lending?
• What are the advantages and disadvantages of covenant-lite loans from both the lender and borrower perspectives?
• Has intense competition among private lenders created a "race to the bottom" as they include fewer and fewer restrictions in loan agreements?
• Considering the huge growth in leveraged lending recently, what has been the impact on default rates?
• How will the shift away from LIBOR impact leveraged lending and restructuring?
• Why has there been such a significant increase in private credit transactions?
• How will rising interest rates impact middle-market companies' access to loans?
• Will the significant M&A activity in the middle market space over the last 18 months result in restructuring activity?
• How do private financing deals work in the motion picture and entertainment industry?
• How has the transition to streaming platforms altered the financing picture in the film industry?

Contact Information:

Stacey Rosenberg

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

The appointment of an independent director to the board of a distressed company has become a common strategy in the chapter 11 playbook. What is the role—and value—of an independent director in an in-court restructuring? Oftentimes appointed by parties in interest, are they in fact independent? Today we discuss this topic and related issues with the CEO of a restructuring service provider company, who has served as an independent director for numerous large scale companies in financial distress.

What We Discussed in This Episode:

• The decisions that chief restructuring officers and independent directors typically make when appointed to financially struggling companies
• The driver for the need of independent directors in modern restructurings
• Whether the recent criticisms of independent directors in chapter 11s is warranted
• Whether the filing of retention applications for the independent director or soliciting creditors' input on who is appointed would address concerns re the independent director model in complex chapter 11 cases

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This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.

The ways that companies connect with their stakeholders has dramatically changed with the rise of digital and social media and a challenge to the concept of shareholder primacy. We speak with Sydney Isaacs and Dan Scorpio of Abernathy MacGregor on how companies can effectively reach their customers, vendors and employees during times of uncertainty such as a corporate restructuring.

With over 17 years at Abernathy, Sydney advises companies on transactions, crises and other times of transition, including restructuring. Dan, who joined Abernathy in 2015, is the head of M&A and activism.

Abernathy MacGregor is a strategic communications advisory firm that provides communications, stakeholder engagement and advocacy expertise to management teams and boards during mergers, social media crises, and distress. Abernathy has advised companies in chapter 11, including, among others, Alpha Media, Valaris, Parker Drilling, Brookstone, J. Crew Group, and Philadelphia Energy Solutions, and has also advised the City of Detroit in its Chapter 9 filing.

What We Discussed in This Episode:

• What a communication team does behind the scenes when a company files chapter 11
• Whether to engage, or dodge, the press in corporate restructuring situations
• The likelihood of an information leak, and its impact on a distressed company's value
• How a company's management should message the company's situation to employees
• Best practices in managing customer and vendor communications

Contact Information:

Sydney Isaacs

Dan Scorpio

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

The restructuring industry has been greatly impacted by the uncertainty that the global pandemic has brought. What does this mean for the future of restructuring? Which sectors will have been most severely impacted? We speak with Gaurav Malhotra of Ernst & Young LLP, who is a member of the EY Global Restructuring team and US Restructuring Leader.

With more than 20 years of experience leading financial and operational restructuring assignments, Gaurav has advised leadership of enterprises ranging from Fortune 100 companies to middle market corporations. Gaurav has strategized turnaround plans in sectors including, among others, commercial airlines, and Tier 1 automotive suppliers, as well large scale local government restructurings, including the City of Detroit and Puerto Rico.

What We Discussed in This Episode:

• How EY may be unique among the Big Four in the restructuring industry, and how that has affected EY's growth
• What the Global Financial Crisis of 2008 taught us as we address the economic impact of COVID-19 pandemic
• The next potential drivers of a restructuring cycle, and what's to come in 2022
• How ESG issues, whether environmental, societal, or social in nature, may ultimately impact restructuring

Contact Information:

Gaurav Malhotra

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

In this special installment of 'Restructure This!' sponsored by the American Bankruptcy Institute, we welcome Chief Judge David R. Jones and Judge Marvin Isgur from the United States Bankruptcy Court for the Southern District of Texas. The two esteemed jurists collectively have several decades of experience on the bench and have presided over some of the largest chapter 11 filings in recent memory, including Seadrill, J.C. Penney, iHeartMedia, and Ultra Petroleum. As part of today's conversation, the judges opine on venue reform, third party releases, one day "prepacks," and the propriety of repeat independent directors in chapter 11.

What We Discussed in This Episode:

• The importance that the judges place on consumer debtor cases
• The basis for the rise of large chapter 11 filings in the Southern District of Texas
• Whether the current venue statute needs reform
• Policy concerns regarding third-party releases
• The circumstances in which expedited chapter 11 cases are appropriate
• The current independent director framework and whether legislative reform is necessary
• What separates great restructuring lawyers from others

Contact Information:

Chief Judge David R. Jones

Judge Marvin Isgur

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

Canada legalized recreational cannabis in 2018, but the legal cannabis market continues to struggle even three years later. Observers blame overregulation by both federal and provincial regimes, high taxation, and a thriving black market that continues to sell cannabis at much lower prices. What has this meant for cannabis bankruptcies in Canada, and what lessons can the U.S. learn? We speak with Kathryn Esaw, partner in the Insolvency and Restructuring group at Osler, Hoskin & Harcourt LLP, and Susan Newell, partner in Osler's Health Industry and Cannabis groups. Kathryn's practice focuses on proceedings under the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act throughout Canada. She has represented debtors, court officers, creditors, purchasers and lenders. Kathryn also has experience in restructurings under the Canada Business Corporations Act. Susan provides strategic advice to health industry stakeholders in connection with mergers and acquisitions, healthcare corporate restructurings and integrations, corporate governance matters, shareholders agreements, commercial agreements, outsourcing, clinical trial agreements and regulatory opinions in connection with federal and provincial health and cannabis statutes. Susan regularly advises cannabis license holders and other industry participants with navigating Canadian commercial operations within the cannabis regulatory environment, including licensing, supply agreements and promotional and advertising activities.

What We Discussed in This Episode:

• What Canada's federal Cannabis Act governs and the objectives behind the legislation
• What aspects of recreational cannabis sales that the provincial laws govern
• How the Canadian regime differs substantially from the US, where cannabis is still banned at the federal level but over a dozen states have legalized and regulated it
• The structural challenges that legal recreational cannabis market in Canada faces
• How the COVID-19 pandemic impacted cannabis bankruptcies

Contact Information:

Kathryn Esaw bio

Susan Newell bio

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

We speak with James ("Jamie") H. M. Sprayregen, partner at Kirkland & Ellis LLP and founder of the firm's powerhouse bankruptcy restructuring practice. Few know the story of how Jamie built the practice from humble beginnings starting in 1990. In a frank interview, Jamie describes the vision he had three decades ago, the challenges he encountered along the way, and the banner chapter 11 cases—Zenith Electronics, United Airlines—that he believes helped to shape the then-emerging brand of this premier practice. Jamie is partner in the Chicago and New York offices of Kirkland & Ellis. Under Jamie's leadership, the Restructuring Group has represented debtors and creditors in some of the most complex Chapter 11 filings in recent history, including Energy Future Holdings Corp., Seadrill Limited, Caesars Entertainment Operating Co. Inc, Toys "R" Us, Inc., Trans World Airlines, Inc., and Conseco, Inc. In October 2013, Jamie was inducted into the Turnaround Management Association (TMA) Turnaround, Restructuring, and Distressed Investing Industry Hall of Fame‎. From 2013 to 2015, Jamie was appointed to serve a two year term as the President of INSOL International, the world's leading international insolvency association. Jamie is a Fellow in the American College of Bankruptcy.

What We Discussed in This Episode:

• The circuitous, and serendipitous, route by which Jamie arrived as a junior associate at Kirkland in 1990
• The transactional deal that Jamie believes put Kirkland's restructuring practice "on the map"
• That business plan that Jamie, while a senior associate, wrote that envisioned creating "the best bankruptcy practice in the world"
• How the various economic downturns during Jamie's tenure—including the 1989 real estate crash, the 1997-1998 Asian financial crisis, the 2000 dot com crash, the Global Financial Crisis, of 2007-2008 the COVID-19 recession—changed the practice of bankruptcy law

Contact Information:

James H.R. Sprayregen's bio

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs

Inflation is here and seems far from "transitory." Given this, where is the restructuring industry headed? Which sectors are predicted to feel the pain next, and what are governments doing in response to inflationary prices? This episode discusses the impact of inflation on distress as seen from the perspective of a businessperson. It also explores the challenging role of the restructuring advisor—the person seated next to the C-suite managers at a time of stress and distress.

We speak with Mohsin Meghji, managing partner of M3 Partners, LP, a corporate advisory firm experienced in providing financial and operational restructuring. M3 has represented debtors, creditors and equity holders in some of the most complex and contentious restructurings and bankruptcies, including Sanchez Energy, Neiman Marcus, Barneys New York, and Seadrill Partners.

What We Discussed in This Episode:

• The unique challenges of being a chief restructuring advisor, or CRO, in today's economic environment
• How companies are weathering the impacts of the COVID-19 pandemic, and how economic policy is helping or hurting
• The increasing rate of inflation and the ability of companies to raise prices as they encounter increasing costs

Contact Information:

Mohsin Meghji bio

This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs