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Today's Approach to Distressed Situations: A Lessor's Guide
Back in 1985, one of us contributed to an industry publication an article titled Strategies for Recovery in Lessee Bankruptcy. Twenty-two years later, the landscape of bankruptcy law and the leasing industry have changed dramatically, and issues and problems faced by the equipment lessor today have much different priorities. As the equipment leasing community contemplates the landscape today, some new approaches and decision drivers face the leasing executive when his lessee files Chapter 11, or threatens to do so.
Whether bankruptcy professionals blame it on a continuously robust company, too much liquidity in the credit markets, or some other cause, the financial community recognizes that corporate Chapter 11 filings are way down. While these stated reasons are doubtless valid and contributory, the bankruptcy bar and turnaround professionals sometimes fail to recognize and admit that they have been, to some extent, agents of their own distress. Chapter 11 has simply fallen out of favor as a cost-effective and expeditious remedy for debtors and creditors, in part, because every lender and lessor has cultivated an in-house restructuring group ' non-lawyers who can see business solutions in distressed situations and then reach consensus with the customer and other creditors to achieve an end result without the trauma of an intervening bankruptcy case. This private process, however, is more often than not conducted in the looming shadow of the Chapter 11 filing, which will follow if the private restructuring does not come together. To understand and effectively negotiate his position, the equipment lessor's restructuring executive has to grasp the downsides and upsides of a failed negotiation and an ensuing Chapter 11 filing. Here, we briefly point out the important points that have become so much more central to pre-bankruptcy workouts and many of the Chapter 11 cases filed today.
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Protecting Innovation in the Cyber World from Patent Trolls
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