The Evolving Landscape of Distressed Bank Restructurings

The debt plaguing these institutions traditionally consists of senior notes to correspondent lenders, subordinated debentures, and trust preferred securities (TruPS). The debt load threatens the solvency of many bank holding companies and the equity value of the bank holding company's shareholders. Even if a community bank is not severely distressed, large holding company debt can eventually pressure the bank's balance sheet and, at a minimum, eliminate otherwise viable strategic options for putting the bank on a course to sustained financial health, and can attract regulatory attention.

The deterioration of bank credit portfolios during the financial crisis, combined with regulatory enforcement actions that prohibit bank dividends to the bank holding company and general regulatory prohibitions on the up-streaming of dividends if the subsidiary bank is unprofitable, have caused bank holding company liquidity to deteriorate or drain to zero. For smaller bank holdings companies, those with less than $1 billion in assets, holding company liquidity can only be increased by raising equity (or attracting new capital) at the holding company level, a very expensive funding source and also a difficult one to tap in the current fiscal environment. Cash on many bank holding company balance sheets has eroded, and, while the TruPS interest deferment (which cannot exceed five years) buys time, the day of reckoning may be imminent as accrued but unpaid liabilities increase.

The Typical Debt Structure

In addition to having similar debt structures (traditionally comprised of senior debt obligations, TruPS, subordinated debentures and “balance sheet drags” such as NPAs (non-performing assets)), most distressed banks and their holding companies struggle with comparable competing stakeholder interests, including obligations imposed under TARP (the U.S. Treasury's 2008 “Troubled Asset Relief Program” created under the Emergency Economic Stabilization Act of 2008, Division A of Pub. L. 110-343, 122 Stat. 3765), preferred and other equity security holders.

Distressed institutions often also operate under regulatory oversight imposed by Consent Orders, impairing the management of the holding company from exercising free reign over its finances without the substantial burden of first soliciting regulatory approval. The “bank holding company structure” was purportedly designed to support banks by providing a source of strength and capital to the subsidiary bank. Therefore, regulators require that bank holding companies maintain certain levels of capital.

One way bank holding companies elected to maintain this capital was by the issuance of TruPS. The obstacle each troubled holding company must, therefore, eventually confront is the need to attract investor or third party capital, while under the restraints imposed by regulators, and the burden of TruPS “due in full on sale” terms (that enable TruPS to avoid taking a haircut on their debt outside of bankruptcy). In re BankAtlantic Bancorp, Inc. Litig., Slip. Op. Consol. C.A. No. 7068 VCL (Del. Ch. Feb. 27, 2012).

And if the bank holding company has more than one distressed subsidiary bank, the failure of one could result in cross-guarantee liability to the other surviving subsidiaries for losses sustained under the Federal Deposit Insurance Act of 1950, Pub. L. 81-797, 64 Stat. 873 (FDIA), adding to the existent balance sheet debt.'

Strategies

Three discrete options have evolved as available solutions to the over-leveraged distressed financial institution under increasing regulatory scrutiny and financial stress. One obvious but patently unappealing alternative is to allow the regulators to seize the bank subsidiary. There is no cognizable upside to seizure, other than walking away from any further role with the troubled subsidiary bank.

Allowing a subsidiary seizure can also deepen the insolvency of the remaining components of the banking enterprise because of the FDIA cross-bank guarantee. The remaining two alternatives require far more from management and the bank holding company board. The bank holding company can either: 1) sell the subsidiary bank or banks in a “' 363 sale” under the supervision of the United States Bankruptcy Court (the Bankruptcy Court); or 2) seek to recapitalize and reorganize in or out of the Bankruptcy Court. Several holding companies have filed, and subsidiary banks have been sold by order of the Bankruptcy Court, but in-court recapitalization and/or restructuring remains an attractive, albeit difficult option available to struggling holding companies. These recapitalizations require an engaged board, an active investment banker and skilled corporate and bankruptcy counsel to structure a plan that will meet the requirements of the Bankruptcy Code, but also satisfy the debt holders and regulators.

Seizure

There is no conceivable benefit to the holding company's creditors, equity security holders or other stakeholders in the case of an FDIC seizure of a banking subsidiary. In addition to the loss of essentially all value (including deferred tax benefits described further below), the FDIC has the capacity to charge sister bank subsidiaries (under common ownership) with “guaranty” liability for the debts of the seized institution. An FDIC cross-guaranty claim is also generally senior to the claims of the holding companies and its affiliates. In the exercise of their enhanced fiduciary duty (if in the zone of insolvency), holding company boards are well advised to at least explore and consider the available alternatives to the complete loss of value (and the saddling of debt) associated with FDIC seizures. There is also a public policy argument against seizure (if viable alternatives exist to salvage value), not the least of which is the further depletion of FDIC funds.

Section 363 Sale

Where out-of-court restructurings and capital attraction proves unrealistic for a particular bank, bank holding companies have turned to filing for relief under the Bankruptcy Code as a tool to deleverage through the sale process of a distressed subsidiary only available under the Bankruptcy Code. Once in bankruptcy, the holding company may seek Bankruptcy Court approval to sell one or more subsidiary banks, potentially free from the traditional TruPS “due in full on sale” indenture provisions.

Severing an ailing bank subsidiary from its holding company can be crucial to effecting a recapitalization of the bank. The sale of bank stock in a bankruptcy of the holding company can provide an effective means to accomplish such a transaction. The process substitutes the certainty and finality of the Bankruptcy Court's order for the consent of the shareholders and creditors, which may otherwise be practically unobtainable. The Bankruptcy Court's sale order also provides certainty and protection against litigation for the buyer, its investors, the holding company's directors, and even the TruPS trustee.

'The successful bidder benefits from a transparent process and “market check” (from competitive bidding) ending with the certainty of a court order under ' 363 of the Bankruptcy Code. The sale also nullifies the threat that litigation could be used to extract an above-market payment to the creditors and/or shareholders of the holding company.' The bank and holding company directors benefit from the protection of the Bankruptcy Court approval of the “fairness” and “market check” of the winning bid ' minimizing the risk of derivative litigation (or by the FDIC) against bank holding company management and its board for breach of fiduciary duty and other claims.

Bank holding company creditors also benefit from the relative expediency of the sale process in determining the priority of the claims. The TruPS trustee benefits from having a forum in which to express and advance the interests of the holders regarding the terms of the sale and the fairness of the transaction. The shareholders of the bank holding company benefit from the possibility that, if value can be created through a bidding war, or other holding company assets exist that can be reduced to cash, the Bankruptcy Court will pay greater attention to their interests. A ' 363 sale is also often considered to be in the public interest because regulatory resources are not wasted on the seizure of a bank that can be saved and depositors in the community are not subjected to a disruptive transition.

In late 2012, the holding companies for Mile High Banks, First Place Bank and Premier Bank each filed for relief under Chapter 11 in order to sell their most valuable assets, their subsidiary banks. See, e.g., In re First Place Fin. Corp., No. 12-12961 (Bankr. D. Del. filed Oct. 29, 2012); In re Big Sandy Holding Co., No. 12-30138 (Bankr. D. Colo. filed Sept. 27, 2012); In re Premier Bank Holding Co., No. 12-40550 (Bankr. N.D. Fla. filed Aug. 15, 2012). An entity controlled by Wilbur Ross was the successful bidder and ultimately purchased Florida's First Place Bank pre-seizure but after its holding company filed for relief in Delaware. In re First Place (Case No. 12-12961).

If subsidiary banks are placed into FDIC receivership, the holding company creditors and shareholders will likely receive nothing for their debt or interests. Conversely, the adverse publicity of the bank holding company bankruptcy can be minimized by an appropriately planned public relations campaign that takes advantage of the proposed sale the bank subsidiary, placing the bank in the more “financially stable” hands of the investor group.

Recapitalization and Restructuring

In order to avoid the loss of value in the operating subsidiary banks, and commensurate loss to equity and the other bank holding company stakeholders resulting from a sale of the subsidiary bank pursuant to ' 363 of the Bankruptcy Code, some bank holding companies have sought to garner pre-bankruptcy support for a “prepackaged” restructuring plan at the bank holding company level that essentially: 1) preserves the bank's deferred tax attributes (such as net operating losses (or NOLs) that can be preserved through a bankruptcy based restructuring, to offset future taxes, so long as 50% of the equity in the new company goes to investors who have held their debt in the old company for more than 18 months, under the “bankruptcy exception” in IRC Section 382); 2) offers equity in the reorganized debtor to debt holders, such as the TruPS (often held as CDOs), and thereby; 3) attracts capital and new investors, potentially right-sizing the capital-debt ratio and easing regulatory oversight, while opening access to the capital markets.

In addition to the preservation of NOLs, other substantial tax benefits could also be retained at the bank holding company level, as recently occurred in the Imperial Capitol Bancorp, Inc. case in the Southern District of California. There, the debtor bank holding company was able to retain a substantial tax refund attributable in large part to losses at its subsidiary bank because a pre-petition tax allocation agreement (TAA) between the holding company and its subsidiary rendered the tax refund “property of the estate” of the holding company. In re Imperial Capitol Bancorp, Inc., No. 10-1991, __ B.R. __, 2013 WL 2149982 (S.D. Cal., May 15, 2013). The enforceability of such pre-bankruptcy TAAs has also been sustained in favor of the bank holding companies in FDIC v. AmFin Financial Corp., 490 B.R. 548 (N.D. Ohio 2013) and in the Bankruptcy Court for the Central District of California in Siegel v. FDIC (In re IndyMac Bancorp Inc.), No. 09-01698, 2012 WL 1037481 (Bankr. C. D. Cal., March 29, 2012).

Bank recapitalization plans are invariably structured pre-bankruptcy as a prepackaged or pre-arranged plan with substantial negotiations by and among management of the bank holding company, the TruPS, regulators, and other key-debt holders. Those negotiations are greatly facilitated and enhanced if the appropriate party holding the TruPS with authority to negotiate on their behalf can be identified.

One fund active in this space, HoldCo Advisors, LP, has been able to do so successfully. However, as evidenced by recent filings like Capitol Bancorp in Michigan, the riskier but potentially more lucrative prepackaged plan process, which promises far greater return to bank holding company stakeholders (sometimes four times the value to such stakeholders as compared to a ' 363 sale) is by no means a guaranteed success. As in Capitol Bancorp, the capital investor transaction embodied in the prepackaged plan remained subject to regulatory scrutiny, (which should be obtained pre-petition or as early on as possible in the plan process). Citing regulatory hurdles, the investor in Capitol Bancorp walked from the deal, and Capitol Bancorp has, thereafter, sought to sell certain of its subsidiary banks. See Reuters, Capitol Bancorp Ltd Scraps Restructuring Bid, Puts Banks Up For Sale, (May 20, 2013), http://goo.gl/VoApG.

Although it is the more complex and “risky” route to take (in terms of execution success) in order to salvage a subsidiary bank and enhance distribution and value to stakeholders (including equity security holders) at the bank holding company level, prepackaged/prearranged plans premised on preservation of tax deferred and other tax attributes and assets, and a negotiated deal with debt holders such as the TruPS, can be the best path to attract capital, avoid a further drain on depleting FDIC insurance funds, and preserve the going concern value of the enterprise for all parties in interest. As in those cases where for one reason or another, the plan failed or regulators blocked its success, a sale of the subsidiary banks under ' 363 of the Bankruptcy Code remains as an available fall-back option to the holding company in Chapter 11.

Conclusion

Managing an overleveraged bank, in a tight capital market and a highly regulated industry, is extraordinarily challenging ' but that is the current state of banking in the United States. As we work our way out of one of the worst recessions in U.S. history, bank management will face challenges that can be overcome as capital becomes more available, and as bankruptcy courts facilitate debt restructurings that focus on value preservation and maximization through recapitalizations or sales of operating subsidiary banks, on a case by case basis, with the best interests of all stakeholders in mind.

Louis T. DeLucia is a partner in Schiff Hardin LLP's Bankruptcy, Restructuring and Creditors' Rights practice group. The author gratefully acknowledges the invaluable assistance of Alyson M. Fiedler, Mathew W. Ott and Sara Rosenberg, of Schiff Hardin LLP and Stephen J. Antal, President of Schiff Hardin Strategic Advisors, LLC.

Over the past decade, the landscape for struggling distressed financial institutions has evolved, but has not changed dramatically. To put it in perspective, in 2005-2006, there were essentially no bank failures. At its peak, however, as the economic crisis matured in 2010, there were 157 bank failures. That same year, the FDIC's confidential “problem” institution list (which identifies banks that demonstrate weaknesses that threaten their financial viability) mirrored the rise in bank failures, and spiked at 884 financial institutions. Since 2010, the number of actual bank failures has declined from the high of 157 in 2010 to 92 in 2011 and 51 in 2012. However, in 2013, the FDIC's “watch list” of troubled lending institutions remains at a historic level, at nearly 700 (or 10% of the country's 7181 chartered banks) ' extraordinary when compared with the prior decade when the list never rose to more than 150 troubled institutions attracting the FDIC's attention. Although actual failures appear to have declined, the FDIC's list of nearly 700 “problem” banks reveals that the problem of inadequate bank capitalization and the need for restructuring remains strong.

The Capital Problem

The significant debt load carried by many bank holding companies as a result of decades of over-leveraging continues to plague lenders and persists as a major industry-wide impediment to community and other bank recapitalizations, impairing, if not precluding, conventional merger and acquisition opportunities.

The debt plaguing these institutions traditionally consists of senior notes to correspondent lenders, subordinated debentures, and trust preferred securities (TruPS). The debt load threatens the solvency of many bank holding companies and the equity value of the bank holding company's shareholders. Even if a community bank is not severely distressed, large holding company debt can eventually pressure the bank's balance sheet and, at a minimum, eliminate otherwise viable strategic options for putting the bank on a course to sustained financial health, and can attract regulatory attention.

The deterioration of bank credit portfolios during the financial crisis, combined with regulatory enforcement actions that prohibit bank dividends to the bank holding company and general regulatory prohibitions on the up-streaming of dividends if the subsidiary bank is unprofitable, have caused bank holding company liquidity to deteriorate or drain to zero. For smaller bank holdings companies, those with less than $1 billion in assets, holding company liquidity can only be increased by raising equity (or attracting new capital) at the holding company level, a very expensive funding source and also a difficult one to tap in the current fiscal environment. Cash on many bank holding company balance sheets has eroded, and, while the TruPS interest deferment (which cannot exceed five years) buys time, the day of reckoning may be imminent as accrued but unpaid liabilities increase.

The Typical Debt Structure

In addition to having similar debt structures (traditionally comprised of senior debt obligations, TruPS, subordinated debentures and “balance sheet drags” such as NPAs (non-performing assets)), most distressed banks and their holding companies struggle with comparable competing stakeholder interests, including obligations imposed under TARP (the U.S. Treasury's 2008 “Troubled Asset Relief Program” created under the Emergency Economic Stabilization Act of 2008, Division A of Pub. L. 110-343, 122 Stat. 3765), preferred and other equity security holders.

Distressed institutions often also operate under regulatory oversight imposed by Consent Orders, impairing the management of the holding company from exercising free reign over its finances without the substantial burden of first soliciting regulatory approval. The “bank holding company structure” was purportedly designed to support banks by providing a source of strength and capital to the subsidiary bank. Therefore, regulators require that bank holding companies maintain certain levels of capital.

One way bank holding companies elected to maintain this capital was by the issuance of TruPS. The obstacle each troubled holding company must, therefore, eventually confront is the need to attract investor or third party capital, while under the restraints imposed by regulators, and the burden of TruPS “due in full on sale” terms (that enable TruPS to avoid taking a haircut on their debt outside of bankruptcy). In re BankAtlantic Bancorp, Inc. Litig., Slip. Op. Consol. C.A. No. 7068 VCL (Del. Ch. Feb. 27, 2012).

And if the bank holding company has more than one distressed subsidiary bank, the failure of one could result in cross-guarantee liability to the other surviving subsidiaries for losses sustained under the Federal Deposit Insurance Act of 1950, Pub. L. 81-797, 64 Stat. 873 (FDIA), adding to the existent balance sheet debt.'

Strategies

Three discrete options have evolved as available solutions to the over-leveraged distressed financial institution under increasing regulatory scrutiny and financial stress. One obvious but patently unappealing alternative is to allow the regulators to seize the bank subsidiary. There is no cognizable upside to seizure, other than walking away from any further role with the troubled subsidiary bank.

Allowing a subsidiary seizure can also deepen the insolvency of the remaining components of the banking enterprise because of the FDIA cross-bank guarantee. The remaining two alternatives require far more from management and the bank holding company board. The bank holding company can either: 1) sell the subsidiary bank or banks in a “' 363 sale” under the supervision of the United States Bankruptcy Court (the Bankruptcy Court); or 2) seek to recapitalize and reorganize in or out of the Bankruptcy Court. Several holding companies have filed, and subsidiary banks have been sold by order of the Bankruptcy Court, but in-court recapitalization and/or restructuring remains an attractive, albeit difficult option available to struggling holding companies. These recapitalizations require an engaged board, an active investment banker and skilled corporate and bankruptcy counsel to structure a plan that will meet the requirements of the Bankruptcy Code, but also satisfy the debt holders and regulators.

Seizure

There is no conceivable benefit to the holding company's creditors, equity security holders or other stakeholders in the case of an FDIC seizure of a banking subsidiary. In addition to the loss of essentially all value (including deferred tax benefits described further below), the FDIC has the capacity to charge sister bank subsidiaries (under common ownership) with “guaranty” liability for the debts of the seized institution. An FDIC cross-guaranty claim is also generally senior to the claims of the holding companies and its affiliates. In the exercise of their enhanced fiduciary duty (if in the zone of insolvency), holding company boards are well advised to at least explore and consider the available alternatives to the complete loss of value (and the saddling of debt) associated with FDIC seizures. There is also a public policy argument against seizure (if viable alternatives exist to salvage value), not the least of which is the further depletion of FDIC funds.

Section 363 Sale

Where out-of-court restructurings and capital attraction proves unrealistic for a particular bank, bank holding companies have turned to filing for relief under the Bankruptcy Code as a tool to deleverage through the sale process of a distressed subsidiary only available under the Bankruptcy Code. Once in bankruptcy, the holding company may seek Bankruptcy Court approval to sell one or more subsidiary banks, potentially free from the traditional TruPS “due in full on sale” indenture provisions.

Severing an ailing bank subsidiary from its holding company can be crucial to effecting a recapitalization of the bank. The sale of bank stock in a bankruptcy of the holding company can provide an effective means to accomplish such a transaction. The process substitutes the certainty and finality of the Bankruptcy Court's order for the consent of the shareholders and creditors, which may otherwise be practically unobtainable. The Bankruptcy Court's sale order also provides certainty and protection against litigation for the buyer, its investors, the holding company's directors, and even the TruPS trustee.

'The successful bidder benefits from a transparent process and “market check” (from competitive bidding) ending with the certainty of a court order under ' 363 of the Bankruptcy Code. The sale also nullifies the threat that litigation could be used to extract an above-market payment to the creditors and/or shareholders of the holding company.' The bank and holding company directors benefit from the protection of the Bankruptcy Court approval of the “fairness” and “market check” of the winning bid ' minimizing the risk of derivative litigation (or by the FDIC) against bank holding company management and its board for breach of fiduciary duty and other claims.

Bank holding company creditors also benefit from the relative expediency of the sale process in determining the priority of the claims. The TruPS trustee benefits from having a forum in which to express and advance the interests of the holders regarding the terms of the sale and the fairness of the transaction. The shareholders of the bank holding company benefit from the possibility that, if value can be created through a bidding war, or other holding company assets exist that can be reduced to cash, the Bankruptcy Court will pay greater attention to their interests. A ' 363 sale is also often considered to be in the public interest because regulatory resources are not wasted on the seizure of a bank that can be saved and depositors in the community are not subjected to a disruptive transition.

In late 2012, the holding companies for Mile High Banks, First Place Bank and Premier Bank each filed for relief under Chapter 11 in order to sell their most valuable assets, their subsidiary banks. See, e.g., In re First Place Fin. Corp., No. 12-12961 (Bankr. D. Del. filed Oct. 29, 2012); In re Big Sandy Holding Co., No. 12-30138 (Bankr. D. Colo. filed Sept. 27, 2012); In re Premier Bank Holding Co., No. 12-40550 (Bankr. N.D. Fla. filed Aug. 15, 2012). An entity controlled by Wilbur Ross was the successful bidder and ultimately purchased Florida's First Place Bank pre-seizure but after its holding company filed for relief in Delaware. In re First Place (Case No. 12-12961).

If subsidiary banks are placed into FDIC receivership, the holding company creditors and shareholders will likely receive nothing for their debt or interests. Conversely, the adverse publicity of the bank holding company bankruptcy can be minimized by an appropriately planned public relations campaign that takes advantage of the proposed sale the bank subsidiary, placing the bank in the more “financially stable” hands of the investor group.

Recapitalization and Restructuring

In order to avoid the loss of value in the operating subsidiary banks, and commensurate loss to equity and the other bank holding company stakeholders resulting from a sale of the subsidiary bank pursuant to ' 363 of the Bankruptcy Code, some bank holding companies have sought to garner pre-bankruptcy support for a “prepackaged” restructuring plan at the bank holding company level that essentially: 1) preserves the bank's deferred tax attributes (such as net operating losses (or NOLs) that can be preserved through a bankruptcy based restructuring, to offset future taxes, so long as 50% of the equity in the new company goes to investors who have held their debt in the old company for more than 18 months, under the “bankruptcy exception” in IRC Section 382); 2) offers equity in the reorganized debtor to debt holders, such as the TruPS (often held as CDOs), and thereby; 3) attracts capital and new investors, potentially right-sizing the capital-debt ratio and easing regulatory oversight, while opening access to the capital markets.

In addition to the preservation of NOLs, other substantial tax benefits could also be retained at the bank holding company level, as recently occurred in the Imperial Capitol Bancorp, Inc. case in the Southern District of California. There, the debtor bank holding company was able to retain a substantial tax refund attributable in large part to losses at its subsidiary bank because a pre-petition tax allocation agreement (TAA) between the holding company and its subsidiary rendered the tax refund “property of the estate” of the holding company. In re Imperial Capitol Bancorp, Inc., No. 10-1991, __ B.R. __, 2013 WL 2149982 (S.D. Cal., May 15, 2013). The enforceability of such pre-bankruptcy TAAs has also been sustained in favor of the bank holding companies in FDIC v. AmFin Financial Corp. , 490 B.R. 548 (N.D. Ohio 2013) and in the Bankruptcy Court for the Central District of California in Siegel v. FDIC (In re IndyMac Bancorp Inc.), No. 09-01698, 2012 WL 1037481 (Bankr. C. D. Cal., March 29, 2012).

Bank recapitalization plans are invariably structured pre-bankruptcy as a prepackaged or pre-arranged plan with substantial negotiations by and among management of the bank holding company, the TruPS, regulators, and other key-debt holders. Those negotiations are greatly facilitated and enhanced if the appropriate party holding the TruPS with authority to negotiate on their behalf can be identified.

One fund active in this space, HoldCo Advisors, LP, has been able to do so successfully. However, as evidenced by recent filings like Capitol Bancorp in Michigan, the riskier but potentially more lucrative prepackaged plan process, which promises far greater return to bank holding company stakeholders (sometimes four times the value to such stakeholders as compared to a ' 363 sale) is by no means a guaranteed success. As in Capitol Bancorp, the capital investor transaction embodied in the prepackaged plan remained subject to regulatory scrutiny, (which should be obtained pre-petition or as early on as possible in the plan process). Citing regulatory hurdles, the investor in Capitol Bancorp walked from the deal, and Capitol Bancorp has, thereafter, sought to sell certain of its subsidiary banks. See Reuters, Capitol Bancorp Ltd Scraps Restructuring Bid, Puts Banks Up For Sale, (May 20, 2013), http://goo.gl/VoApG.

Although it is the more complex and “risky” route to take (in terms of execution success) in order to salvage a subsidiary bank and enhance distribution and value to stakeholders (including equity security holders) at the bank holding company level, prepackaged/prearranged plans premised on preservation of tax deferred and other tax attributes and assets, and a negotiated deal with debt holders such as the TruPS, can be the best path to attract capital, avoid a further drain on depleting FDIC insurance funds, and preserve the going concern value of the enterprise for all parties in interest. As in those cases where for one reason or another, the plan failed or regulators blocked its success, a sale of the subsidiary banks under ' 363 of the Bankruptcy Code remains as an available fall-back option to the holding company in Chapter 11.

Conclusion

Managing an overleveraged bank, in a tight capital market and a highly regulated industry, is extraordinarily challenging ' but that is the current state of banking in the United States. As we work our way out of one of the worst recessions in U.S. history, bank management will face challenges that can be overcome as capital becomes more available, and as bankruptcy courts facilitate debt restructurings that focus on value preservation and maximization through recapitalizations or sales of operating subsidiary banks, on a case by case basis, with the best interests of all stakeholders in mind.

Louis T. DeLucia is a partner in Schiff Hardin LLP's Bankruptcy, Restructuring and Creditors' Rights practice group. The author gratefully acknowledges the invaluable assistance of Alyson M. Fiedler, Mathew W. Ott and Sara Rosenberg, of Schiff Hardin LLP and Stephen J. Antal, President of Schiff Hardin Strategic Advisors, LLC.