During this webcast, a panel of experts examined recent bankruptcy case decisions and assessed their implications on financial and accounting analysis, as well as valuation. Among the cases the panel discussed were two recent decisions from bankruptcy courts in the influential Second (In re AMR Corp.) and Third (In re School Specialty, Inc.) Circuits that reviewed the issue of whether a lender extending credit to a company is entitled to a contractual "make-whole" premium when the borrowing company commences a bankruptcy proceeding and seeks to prepay its obligations. In the AMR opinion, Judge Lane held that certain prepetition financing transactions did not require payment of a "make-whole" premium where the obligations were accelerated due to the bankruptcy filing. The appeal was scheduled for oral argument but it will likely take some time for the Second Circuit to rule on the appeal. These two contrasting bankruptcy court decisions were examined to assess the relevance of make-whole premiums.
The panel also examined default rate interest (both pre- and post-payment), and whether agreements are enforceable as a matter of state law. Cases discussed on this topic included General Growth Properties in New York and the Charles Street African Methodist Episcopal Church bankruptcy matter in Boston. Finally, the panel addressed recent trends in valuation methodologies, the use of experts in bankruptcy litigation and what the courts' decisions regard fair market value and reasonable equivalent value questions. The panel discussed valuation decisions In re TOUSA, Inc. and In re Chemtura Corporation.
Speakers:
- John Garvey, Senior Vice President, NERA Economic Consulting
- Geraldine Ponto, Partner, BakerHostetler
- Stephen Selbst, Partner and Chair, Bankruptcy Practice Group, Herrick, Feinstein LLP
Moderator:
- Dr. Faten Sabry, Senior Vice President, NERA Economic Consulting
The webcast concluded with a Q&A session. To learn more, please visit the West LegalEdcenter website.
