FBFK’s Top 3 Bankruptcy Strategies for 2021

By Rachael Smiley, Bankruptcy Attorney/Shareholder

With the pandemic driving more bankruptcy and business distress discussions than ever, it is imperative to stay ahead of the latest issues and opportunities going into 2021. As you craft your approach in the new year, consider these insights and strategies:

  • Recognize the new and novel stakeholders at the table: The continuing “retailpocolypse” has created a paradigm shift whereby landlords and lenders are increasingly becoming owners of retail businesses. How? By obtaining the retailer’s operating assets and/or real property (e.g. JC Penney) in order to hedge against their own exposure. Meanwhile, the most valuable asset of an otherwise-shuttered retail empire is often its intellectual property, which can be obtained through a bankruptcy sale and used to revive a lifeless retail brand as an online-only purveyor.
  • Fasten your seatbelts for a lengthened distress runway: With the extension of the PPP and other governmental assistance programs, the arrival of a new administration, the increased likelihood of additional stimulus, and the continued willingness of landlords and lenders (who have no other viable option) to forebear on evictions and foreclosures, you can expect bankruptcy cans to be kicked down the road for several more months – perhaps most of 2021. In other words, the expected avalanche of bankruptcy filings may be contained to a mere rockslide for the time being.  Consider using the lengthened runway as an opportunity to renegotiate loan terms or apply a new strategy to a situation that might have previously seemed to be a lost cause.
  • Make the most of the virtual environment to get an edge: Attorneys and financial advisors working in the bankruptcy and distressed spaces have become experts at virtual negotiations, mediations and court appearances by this point. Courts have upped their game and embraced the virtual environment by adopting streamlined procedures and better technology. Many of these changes are (happily) here to stay. You and your advisors can now better monitor court proceedings and participate in important meetings with the click of a mouse – no formal appearance, plane ticket or hotel stay required. So, take advantage of the opportunity to be better informed and increase your participation in matters that you may only have a small stake in – who knows what kind of interesting deal opportunities might arise?

 

Contact Rachael today at 972-378-9111 or rsmiley@fbfk.law

Rachael Smiley, Attorney/Shareholder, is the Bankruptcy Practice Lead at Dallas-based FBFK.

She is experienced in all steps of the Chapter 11 reorganization process, including asset sales, plan confirmation, and post-confirmation plan administration. She also has experience litigating a variety of disputes, including contested matters and adversary proceedings, that arise in or are related to bankruptcy cases, such as valuation disputes, claim objections and avoidance actions. Rachael was honored as a BestLawyers® “One to Watch” in 2021 for Insolvency and Reorganization Law, is a Member of Board of Trustees of the Turnaround Management Association (TMA), and is a Member of the American Bankruptcy Institute.

Representative Bankruptcy and Restructuring Matters



General
  • Represented a national real estate lender in strategies to address non-performing commercial and residential loans, both in and outside of bankruptcy
  • Represented the creditors committee in a successful chapter 11 reorganization of a major hospital association in New Mexico
  • Represented numerous small- and midsized businesses and landlords in successful out-of-court restructurings and workouts
  • Represented the Commonwealth of Pennsylvania in the chapter 11 reorganization of Think Finance, an online consumer lender alleged to have violated consumer lending laws
  • Represented a manufacturer of medical automated ventilators in a successful chapter 11 reorganization
  • Representing the Official Committee of Unsecured Creditors in the reorganization of an international manufacturer of toy and hobby-grade drones and related devices where the Committee was the successful plan proponent
  • Represented the Debtors in a complex hotel and restaurant chapter 11 reorganization in East Texas
  • Represented the Asbestos Claimants’ Committee in ASARCO, LLC’s bankruptcy
  • Represented the Future Claimants Representative in General Motors’ bankruptcy
  • Represented the chapter 11 trustee litigation related to the liquidation of assets of a real estate holding company that was determined to be a Ponzi-like scheme in order to return value to defrauded investors
  • Represented the senior secured lender in a Chapter 15 matter regarding the enforceability of Mexican corporation’s plan of reorganization against U.S. creditors
  • Represented the Office of the Commissioner of Baseball in Texas Rangers Baseball Partners’ bankruptcy
  • Represented a former equity holder in obtaining a “take nothing” judgement against a bank that alleged he had received a fraudulent conveyance of $550,000 for the redemption of his equity, as well as obtaining a full awarded of attorneys fees as a prevailing defendant under the Texas Uniform Fraudulent Transfers Act following a two-month trial in a multiyear complex commercial dispute
  • Represented creditors, including financial institutions and commercial landlords, in bankruptcy cases

Our Bankruptcy and Restructuring Team

News & Events

InfoWars and Sub V: Can Alex Jones’ Media Companies Use Small Business Reorganization to Curb Sandy Hook Defamation Liability?

InfoWars and Sub V: Can Alex Jones’ Media Companies Use Small Business Reorganization to Curb Sandy Hook Defamation Liability?

Last week, three media sites affiliated with InfoWars and Alex Jones (InfoW LLC, IWHealth LLC and Prison Planet TV LLC – together, InfoWars), recently filed for Chapter 11 bankruptcy protection in the Untied States Bankruptcy Court for the Southern District of Texas. Notably, the InfoWars debtors elected to proceed under Subchapter V of Chapter 11 of the Bankruptcy Code (Sub V) which provides for “Small Business Reorganization.” What is unique about this approach to Chapter 11 reorganization? More importantly, what does this mean in terms of how the InfoWars case may proceed in bankruptcy?

read more