My New BFF Is a Smart VDR

My Dear SmartRoom, you are my new BFF (best friend forever)! You are a smart, secure VDR (virtual data room) that was first conceived to securely host due diligence documents for an expedited Chapter 11 asset sale of multiple properties with multiple potential bidders. Why do I love thee now, more than ever, my trusted, always there, friend? You are secure, I can reach you whenever and whereever, and your features continue to evolve making you better almost every time I see you. You help me to provide more efficient, valuable service to my clients.

I know I must take care. As files have transitioned from paper to digital over the last decade, companies have had to adapt and find new ways to share those files. Consumer platforms like Google Docs, DropBox, etc. are being used by individuals, companies and their professional advisers for sharing digital files. But that means those files can be shared with others, copied endlessly, and accessed by and from the most unsavory of characters and places. Oh, what a security nightmare! I can hardly believe some get so carried away by the excitement of sharing data that they forget about security. Little do they realize that ease-of-use and security are mutually exclusive in most of those consumer file-sharing platforms. So, while one may be able to share a file with another party quite easily, what that party does with that file thereafter is anyone's guess. How wonderful that you offer the security and reporting capabilities to properly account for a file once it has been shared. I especially love that you can remotely detonate a document! It reminds me of the old mission impossible.

Restructuring Securely

Did I tell you that I recently managed the entire restructuring of a company using you, my awesome SmartRoom? You were up and operational in just an hour. Your 24/7 service team was quick to help create various user access profiles, the file folder structure and preliminary document uploads at no extra charge.

Obviously, our client wanted to limit who knew the company was exploring strategic alternatives. Initially, you invited the company's legal counsel, CEO, General Counsel and Treasury Manager. They loved you because you were outside the company's servers but totally secure. They could control access on a “need-to-know” basis. You understood that exchanging confidential company information, whether for a strategic event or day-to-day purposes, required flexibility without sacrificing data security.

Anyway, we started by having you securely host the company's sensitive, legal and financial information for sharing with legal counsel. We were able to add parties and custom access/views as circumstances progressed. The company learned that for distressed issuers, an exchange offer is probably the best non-bankruptcy restructuring option. They could reduce interest payments or cash interest expense (by exchanging debt securities with a high rate for a lower one), reduce the principal amount of outstanding debt (in the case of a debt equity swap), manage its maturity dates (by exchanging debt securities that are coming due for debt securities with an extended maturity) and reduce or eliminate burdensome covenants (if coupled with an exit consent). In order to preserve its available cash resources the company decided to create and execute an exchange offer.

We had you, SmartRoom, invite investment bankers into the room. Since the company was publicly traded and had issued publicly traded debt and equity, we encountered the challenge that issuing public companies have in identifying the actual (beneficial) owners of their debt and equity. If you want to know more about that, check out my prior musings on solicitation of publicly traded securities. So, we created a new folder and engaged in researching the identity of the holders of the debt securities. After all beneficial holders who were eligible to participate in the offer were identified, you were able to discreetly notify the beneficial holders, providing detailed instructions on how to securely access, view the offer documents with complete confidentiality, submit questions and inquiries and even submit their completed offer documents for review and processing by the exchange agent.

Your Q&A module was perfect in putting limits on questions by type and time period. Then, when the company decided to modify the terms of the exchange offer during the offer period, you were able to post updates and quickly notify qualified parties of material changes in the exchange offer.

The company and investment bankers were delighted by your alerts, which immediately notified specified personnel when a qualified party accessed the site, reviewed the offer documents and/or submitted offer documents to participate in the exchange. This was in addition to you holding the continually maintained register of holders' commitments to exchange. Because of the powerful real time reporting you provided, the decision makers were continually aware of the level of commitments to the exchange offer and as the offer progressed closer to the expiration date, they were able to proactively engage in a campaign to reach out to qualified parties that had not yet either accessed the site, viewed the offer documents, or consented to the offer. This greatly increased the number of qualified parties committing to the offer. Even the Exchange Agent was impressed with the level of security, communication and reporting you provided. Though I'm not sure they were all that thrilled that your efficiency resulted in a limited use of their services.

Chapter 11

Unfortunately, when the requisite level of exchange commitments was not met, the company had to switch gears and decided to prepare for a formal restructuring under Chapter 11. With the beneficial holders already identified for the exchange offer, the company and its advisors were already aware of the major players with whom they would have to engage and negotiate.

Oh, I realize I am getting so long-winded, but I know just how much you care about protection of information, secure collaboration and shared success!

We set up a folder structure for the next phase of information collection, and assigned various user access rights as appropriate. We took advantage of your very cool security profiles feature of being able to display specific documents and/or folders as visible only to those with assigned user rights. My favorite example was that the Financials and its sub folders of DIP, Exit Financing and Cash Flow Projections were not visible to those with only Human Resources user access credentials. The company was again pleased at the concept of you as a secure, central, cloud-based location for the controlled sharing of information. After the exchange exercise they really appreciated how you were dramatically increasing the speed of documentation review and delivery among the broadening mix of team members from multiple firms.

The Folder Function

The following folders made the planning and execution go so much more smoothly than how I had previously managed Chapter 11 cases. First, the Team Contacts folder containing the v-card information for each member of the team as well as identification of roles: the company personnel, the law firm team members, bankers, financial advisors, information, notice and claims agent. Next, a Petition Package folder for all components of the voluntary filing: Petition and Exhibit A, Corporate Resolution, list of largest unsecured creditors, master mailing list. I set up other folders such as Noticing, which facilitated gathering and ongoing management of information for key parties to be notified of the filing and the master mailing list sorted by type of party ( e.g. , secured or unsecured creditor, utility, contract counter party, bondholder, shareholder, etc.); a Critical Communications folder for the press release, investor, bondholder, vendor and supplier letters, plus HR, and manager talking points ' here your Q&A feature again facilitated updates as managers raised and shared new issues.

The First Day Motions folder is where we housed information for any drafts of employee wage, utility, cash collateral usage and other motions requiring early consideration in the case. Through your Q&A module all team communications were centrally maintained. References and links to specific resident files/folders or newly added files securely eliminated the dependency on email communications and source files being located in unknown places. Additional controls such as auto-routing to a subject matter expert (with or without having a moderator) and the ability to put limits on questions by type or time period really helped expedite workflow and coordination amongst the various parties.

During the prep period, we would upload new drafts and you would automatically delete and replace the old versions. It was good to know that if preferred, you could also be set to retain the old versions. The Approved for Filing folder worked well as a staging location with subfolders To Be Filed and Filed. Based on your alert feature, the team responsible for serving documents would check the Filed folder, see the relevant notes, could employ Q&A if necessary, then execute the service. The Documents Served Folder containing not only the documents served but the proofs of service. This made confirming whether a particular party had been served very easy to determine. This was handy later when a creditor claimed not to have been aware of the case and its claims bar date.

Additional Case Management

Dare I go on (and on)? I feel I must finish telling you about the phases of case management where your features and functions were so meaningful!

We needed to get Schedules of Assets and Liabilities as well as the Statement of Financial Affairs completed and on file prior to the Meeting of Creditors. We posted a project plan with assignments resulting in additional users and access profiles. Again, your Q&A and Versioning features came in so handy. Having all contributors use you as a central platform kept our paralegal sane while tracking progress and meeting the filing deadline.

A little later in the case when the company decided to engage in an asset sale process, your File Manager functionality was particularly appreciated due to incorporated keyboard shortcuts, just like Windows Explorer. Our paralegal was thrilled with your Drag and Drop and Bulk Upload capability of being able to upload as much data as needed in one session without issue. The company as well as potential buyers were pleased to see that you were able to host some large scale documents common in the industry and that no plug-ins or IT assistance was needed to log in to see any of the sale documents. Your HTML 5 viewing technology was pleasant (absolutely no one missed the Java update interruptions!). The company and its sell side advisors were able to monitor who was logging in, how often, what exactly was or was not being viewed, etc. It really was so great to lock down view, print, and save rights, prevent “Print Screen”, and report on all document activity. The at-will control over the files, even after they had been shared, and the full audit trail of activity was amazing. I heard that the asset purchaser is now using you for integration activities, congratulations!

I have raved on about your features that repeatedly throughout the case allowed me to collect, manage and deliver relevant information in a timely, secure manner so I think I should close this letter but not before acknowledging that you hosted a copy of the claims register and images of the claims, a mirror of the court docket, and similarly to our use in the exchange offer, solicitation activities were tracked with you, too. I almost forgot to say how excellent the instant alert feature was because I used it many times, like when that ridiculous multi-million dollar claim came in and when the swing vote was finally received. Distributions are nearly done and when the case closes I will ask you to transfer the entire record of the case to a DVD which I will copy and present to each of the advisers. All in all, my experience with you has been so fulfilling, I really can't imagine running a case without you.

Tinamarie Feil is a co-founder and runs the restructuring services division of BMC Group, Inc., a global information management firm. A member of this newsletter's Board of Editors, she can be reached at [email protected] or 212-310-5922.

My Dear SmartRoom, you are my new BFF (best friend forever)! You are a smart, secure VDR (virtual data room) that was first conceived to securely host due diligence documents for an expedited Chapter 11 asset sale of multiple properties with multiple potential bidders. Why do I love thee now, more than ever, my trusted, always there, friend? You are secure, I can reach you whenever and whereever, and your features continue to evolve making you better almost every time I see you. You help me to provide more efficient, valuable service to my clients.

I know I must take care. As files have transitioned from paper to digital over the last decade, companies have had to adapt and find new ways to share those files. Consumer platforms like Google Docs, DropBox, etc. are being used by individuals, companies and their professional advisers for sharing digital files. But that means those files can be shared with others, copied endlessly, and accessed by and from the most unsavory of characters and places. Oh, what a security nightmare! I can hardly believe some get so carried away by the excitement of sharing data that they forget about security. Little do they realize that ease-of-use and security are mutually exclusive in most of those consumer file-sharing platforms. So, while one may be able to share a file with another party quite easily, what that party does with that file thereafter is anyone's guess. How wonderful that you offer the security and reporting capabilities to properly account for a file once it has been shared. I especially love that you can remotely detonate a document! It reminds me of the old mission impossible.

Restructuring Securely

Did I tell you that I recently managed the entire restructuring of a company using you, my awesome SmartRoom? You were up and operational in just an hour. Your 24/7 service team was quick to help create various user access profiles, the file folder structure and preliminary document uploads at no extra charge.

Obviously, our client wanted to limit who knew the company was exploring strategic alternatives. Initially, you invited the company's legal counsel, CEO, General Counsel and Treasury Manager. They loved you because you were outside the company's servers but totally secure. They could control access on a “need-to-know” basis. You understood that exchanging confidential company information, whether for a strategic event or day-to-day purposes, required flexibility without sacrificing data security.

Anyway, we started by having you securely host the company's sensitive, legal and financial information for sharing with legal counsel. We were able to add parties and custom access/views as circumstances progressed. The company learned that for distressed issuers, an exchange offer is probably the best non-bankruptcy restructuring option. They could reduce interest payments or cash interest expense (by exchanging debt securities with a high rate for a lower one), reduce the principal amount of outstanding debt (in the case of a debt equity swap), manage its maturity dates (by exchanging debt securities that are coming due for debt securities with an extended maturity) and reduce or eliminate burdensome covenants (if coupled with an exit consent). In order to preserve its available cash resources the company decided to create and execute an exchange offer.

We had you, SmartRoom, invite investment bankers into the room. Since the company was publicly traded and had issued publicly traded debt and equity, we encountered the challenge that issuing public companies have in identifying the actual (beneficial) owners of their debt and equity. If you want to know more about that, check out my prior musings on solicitation of publicly traded securities. So, we created a new folder and engaged in researching the identity of the holders of the debt securities. After all beneficial holders who were eligible to participate in the offer were identified, you were able to discreetly notify the beneficial holders, providing detailed instructions on how to securely access, view the offer documents with complete confidentiality, submit questions and inquiries and even submit their completed offer documents for review and processing by the exchange agent.

Your Q&A module was perfect in putting limits on questions by type and time period. Then, when the company decided to modify the terms of the exchange offer during the offer period, you were able to post updates and quickly notify qualified parties of material changes in the exchange offer.

The company and investment bankers were delighted by your alerts, which immediately notified specified personnel when a qualified party accessed the site, reviewed the offer documents and/or submitted offer documents to participate in the exchange. This was in addition to you holding the continually maintained register of holders' commitments to exchange. Because of the powerful real time reporting you provided, the decision makers were continually aware of the level of commitments to the exchange offer and as the offer progressed closer to the expiration date, they were able to proactively engage in a campaign to reach out to qualified parties that had not yet either accessed the site, viewed the offer documents, or consented to the offer. This greatly increased the number of qualified parties committing to the offer. Even the Exchange Agent was impressed with the level of security, communication and reporting you provided. Though I'm not sure they were all that thrilled that your efficiency resulted in a limited use of their services.

Chapter 11

Unfortunately, when the requisite level of exchange commitments was not met, the company had to switch gears and decided to prepare for a formal restructuring under Chapter 11. With the beneficial holders already identified for the exchange offer, the company and its advisors were already aware of the major players with whom they would have to engage and negotiate.

Oh, I realize I am getting so long-winded, but I know just how much you care about protection of information, secure collaboration and shared success!

We set up a folder structure for the next phase of information collection, and assigned various user access rights as appropriate. We took advantage of your very cool security profiles feature of being able to display specific documents and/or folders as visible only to those with assigned user rights. My favorite example was that the Financials and its sub folders of DIP, Exit Financing and Cash Flow Projections were not visible to those with only Human Resources user access credentials. The company was again pleased at the concept of you as a secure, central, cloud-based location for the controlled sharing of information. After the exchange exercise they really appreciated how you were dramatically increasing the speed of documentation review and delivery among the broadening mix of team members from multiple firms.

The Folder Function

The following folders made the planning and execution go so much more smoothly than how I had previously managed Chapter 11 cases. First, the Team Contacts folder containing the v-card information for each member of the team as well as identification of roles: the company personnel, the law firm team members, bankers, financial advisors, information, notice and claims agent. Next, a Petition Package folder for all components of the voluntary filing: Petition and Exhibit A, Corporate Resolution, list of largest unsecured creditors, master mailing list. I set up other folders such as Noticing, which facilitated gathering and ongoing management of information for key parties to be notified of the filing and the master mailing list sorted by type of party ( e.g. , secured or unsecured creditor, utility, contract counter party, bondholder, shareholder, etc.); a Critical Communications folder for the press release, investor, bondholder, vendor and supplier letters, plus HR, and manager talking points ' here your Q&A feature again facilitated updates as managers raised and shared new issues.

The First Day Motions folder is where we housed information for any drafts of employee wage, utility, cash collateral usage and other motions requiring early consideration in the case. Through your Q&A module all team communications were centrally maintained. References and links to specific resident files/folders or newly added files securely eliminated the dependency on email communications and source files being located in unknown places. Additional controls such as auto-routing to a subject matter expert (with or without having a moderator) and the ability to put limits on questions by type or time period really helped expedite workflow and coordination amongst the various parties.

During the prep period, we would upload new drafts and you would automatically delete and replace the old versions. It was good to know that if preferred, you could also be set to retain the old versions. The Approved for Filing folder worked well as a staging location with subfolders To Be Filed and Filed. Based on your alert feature, the team responsible for serving documents would check the Filed folder, see the relevant notes, could employ Q&A if necessary, then execute the service. The Documents Served Folder containing not only the documents served but the proofs of service. This made confirming whether a particular party had been served very easy to determine. This was handy later when a creditor claimed not to have been aware of the case and its claims bar date.

Additional Case Management

Dare I go on (and on)? I feel I must finish telling you about the phases of case management where your features and functions were so meaningful!

We needed to get Schedules of Assets and Liabilities as well as the Statement of Financial Affairs completed and on file prior to the Meeting of Creditors. We posted a project plan with assignments resulting in additional users and access profiles. Again, your Q&A and Versioning features came in so handy. Having all contributors use you as a central platform kept our paralegal sane while tracking progress and meeting the filing deadline.

A little later in the case when the company decided to engage in an asset sale process, your File Manager functionality was particularly appreciated due to incorporated keyboard shortcuts, just like Windows Explorer. Our paralegal was thrilled with your Drag and Drop and Bulk Upload capability of being able to upload as much data as needed in one session without issue. The company as well as potential buyers were pleased to see that you were able to host some large scale documents common in the industry and that no plug-ins or IT assistance was needed to log in to see any of the sale documents. Your HTML 5 viewing technology was pleasant (absolutely no one missed the Java update interruptions!). The company and its sell side advisors were able to monitor who was logging in, how often, what exactly was or was not being viewed, etc. It really was so great to lock down view, print, and save rights, prevent “Print Screen”, and report on all document activity. The at-will control over the files, even after they had been shared, and the full audit trail of activity was amazing. I heard that the asset purchaser is now using you for integration activities, congratulations!

I have raved on about your features that repeatedly throughout the case allowed me to collect, manage and deliver relevant information in a timely, secure manner so I think I should close this letter but not before acknowledging that you hosted a copy of the claims register and images of the claims, a mirror of the court docket, and similarly to our use in the exchange offer, solicitation activities were tracked with you, too. I almost forgot to say how excellent the instant alert feature was because I used it many times, like when that ridiculous multi-million dollar claim came in and when the swing vote was finally received. Distributions are nearly done and when the case closes I will ask you to transfer the entire record of the case to a DVD which I will copy and present to each of the advisers. All in all, my experience with you has been so fulfilling, I really can't imagine running a case without you.

Tinamarie Feil is a co-founder and runs the restructuring services division of BMC Group, Inc., a global information management firm. A member of this newsletter's Board of Editors, she can be reached at [email protected] or 212-310-5922.