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SPECIAL ASSETS MANAGEMENT ASSOCIATION
______________________________Effectively Choosing Professionals
in Special Assetsin Special AssetsJanuary 27, 2011
Kenton Johnson- Executive Vice President, Robb Evans & Associates LLC.Sherrill Johnson- SVP & Senior Counsel, City National Bank
Lance Jurich- Partner, Loeb & Loeb LLPMark Rohman, Executive Director – Restructuring and Transaction Advisory,
C Ad i GCapstone Advisory GroupModerator: Leslie Reuter, SVP & Manager, Commercial Special Assets, California
Bank & Trust
Engaging Professionals toEngaging Professionals to Assist—When and How?
Presented by: Kenton Johnson, Executive Vice President, Robb Evans & Associates ce es de t, obb a s & ssoc ates
LLC
Engaging Professionals to AssistEngaging Professionals to Assist
When do problems or situations indicate an outside professional should help to resolve them?
One obvious and reoccurring situation is real estate appraisers. Banking regulations require the use of qualified real estate appraisers to provide real property appraisals in a specific form and with specific content
3
Engaging Professionals to AssistEngaging Professionals to Assist
Often however, the indication to engage an outside professional is not so clear cut and is not required by regulation. Usually, after some analysis and discussion among bank officers, there is a decision to engage or hire an outside professional because:
The skill to resolve a problem or to complete a specific task needed is not available within the institution, or A report or actions from an experienced and qualified third-party is preferred, or Bank personnel are not legally able to directly work on p g y yresolving the problem or situation.
4
Engaging Professionals to Assist -lExamples
Here are some examples of outside professionals that could be needed to provide a service or to help resolve a problem or situation. Also refer to an expanded exhibit with the materials.
Equipment or inventory appraiserA dit f t b d l di ll t lAuditor for asset-based lending collateralAn experienced, qualified consultant is needed by the borrowerAn experienced, qualified consultant is needed by the bankTh b k d i d t id tt t i t ithThe bank needs an experienced outside attorney to assist with pre-negotiation arrangements and workout effortsThe bank may need specialized attorneys or collection agenciesThe bank may need a qualified property manager or specific realThe bank may need a qualified property manager or specific real estate agents or liquidatorsThe bank may agree for a borrower to complete an Assignment for the Benefit of Creditorst e e e t o C ed to sThe bank and its in-house and outside attorneys may decide it needs a court-appointed receiver 5
Criteria for SelectionCriteria for Selection
When the decision is made to engage or hire an outside professional to help resolve a problem or to provide a specific service, the criteria to select the right professional begin to emerge. The criteria should always include the following:
Qualifications and ExperienceRequired licenses or credentialsqGeneral education and industry recognition (MAI, CPM, CCIM, SIOR, Member of BOMA, CTP, CFE),Length depth and breadth of experience providing theLength, depth, and breadth of experience providing the requested serviceReferences or personal experience with the professional
6
Fees and Expenses and ll jOverall Project Cost
General pricing within the industry or competitive rangeMutual agreement and understanding on the scope and range of the service to be provided. Fees commensurate with the size of the borrower and scope of pservicesAdditional agreement on expenses above a certain level (if legally permissible)g y p )
7
Compatibility and FitCompatibility and Fit
The principals and staff are professional, communicate clearly and specifically, and respond promptlyThe principals and staff demonstrate a willingness to interact professionally, effectively, and courteously with bank personnel and with a specific borrower and its professionalExecutive bank officers have no substantial reservations or objections about hiring the proposed professionals
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Types of Professionals and ScopeTypes of Professionals and Scope of Services—Who?
Presented by: Leslie Reuter, SVP & Manager, Commercial Special Assets, a age , Co e c a Spec a ssets,
California Bank & Trust
ValuationValuation
AppraisersReal Estate:
SFR, CRE, special purpose, income property, landmarket/liquidation/dark,
ith ith t l t ( h)with or without personal property (car wash), CRE: market approach (owner user) vs income approach (financial investor)
Equipment: forced vs orderly, gross vs netforced vs orderly, gross vs net
Inventory: by SKU, forced vs order, gross vs net, treatment of ineligible
ExaminersAsset based lending (accounts receivable, inventory)
Environmental consultant
LiquidationLiquidation
Collection AgencyNo assets, cost, term
LiquidatorEngaged by borrower or lender
Keeper/MonitorKeeper/MonitorOn-site to collect proceeds of collateral
Property managerAfter OREO
A i (A i t f B fit f C dit )Assignee (Assignment for Benefit of Creditors)Requires borrower to assign assets to the assignee to effectuate liquidation/transfer
Trustee (foreclosure/trustee sale)Non-judicial foreclosure
Repo specialist (vehicles)Repossess, store and auction vehicles
Real Estate Sales AgentsSki /T A S hSkip/Trace Asset Search
ConsultantsConsultants
Operations (industry expertise needed)p ( y p )Consultant with expertise in running a company, with emphasis on industry experience, experience in the problem area (logistics, efficiencies, employee relations, etc)
Turnaround/workoutConsultant who can identify crisis, manage cash, implement management reporting improvements, guide borrower
Balance sheet restructure (negotiate with all the creditors)Consultant who has ability to negotiate with potentially conflicting parties in interest, restructure the balance sheet in a fair and equitable manner & possibly raise new capital (debt or equity)manner & possibly raise new capital (debt or equity)
Consultant to lender group (eyes & ears)More usual in agented bank groups.
C lt t t b ( id th h th )Consultant to borrower (guide through the process)Consultant engaged by borrower to advise it
Outside counselOutside counsel
Workout/bankruptcyKnows the bankruptcy code inside & out; knows the other professionals and works well with them; can handle negotiations or litigation; develops creative solutions
Transactional (sale of assets/business/negotiated restructure, etc)
Expertise in documentation; staffed with paralegals, associates and partner; perfection of security interest; review and clean up of prior docsperfection of security interest; review and clean-up of prior docs
FraudMaintain attorney/client privilege; assist in determining extent of fraud; engage forensic CPAg g
Collection/judgment/enforcementInexpensive; focused on filing suit, obtaining judgment, filing & enforcing judgment lien; handle many small loan. More expensive g j g ; y pfirm often used for larger, more complex collection suits.
Outside counselOutside counsel
Liquidation (UCC foreclosure sale)Files notice and assists with sale of personal property asset to a buyer; often with borrower’s cooperation
Judicial foreclosureTo accomplish foreclosure in states that do not allow a non-judicial foreclosure, or where the one form of action is an issue in California
ReceiverReceiver
FraudSale/management of assetsConsensual, stipulated appointment Non-consensual appointmentNon consensual appointment
FDIC Loss Share Agreements
Presented by: Sherrill Johnson, SVP & S i C l Cit N ti l B kSenior Counsel, City National Bank
Guidance on Reimbursable Expenses d hunder FDIC “Loss Share” Agreements
What is a “Loss Share” Agreement?Rule of “Best Business Judgment” to manage, administer and collect shared loss assetsTimely disavowal of professional contracts after seizurey pPre-seizure professional expenses for services to the failed bank
Generally are not reimbursable if paid by acquiring bankGenerally are not reimbursable if paid by acquiring bankEven if not reimbursable, may be prudent to pay some providers for continuity of serviceUnpaid pre seizure providers must file claims with the FDICUnpaid pre-seizure providers must file claims with the FDIC prior to the claims bar date
Guidance on Reimbursable Expenses d hunder FDIC “Loss Share” Agreements
Use of professionals where acquiring bank has its own “legacy” loan and a loan subject to loss sharePost-seizure professional expenses for services to the failed bank
“Necessary and reasonable” professional fees/costs related to collection of an acquired loan are generally reimbursable at loss share % rateInside counsel/bank staff expenses not reimbursable (“Contractors” gray area)Expenses/fees reimbursable only if acquiring bank would p y q ghave incurred them on a “legacy” loan of its ownSubmit quarterlySubject to FDIC auditSubject to FDIC audit
Detailed View of Three Types ofDetailed View of Three Types of Professionals
Workout Consultant, Outside Counsel, R iReceiver
Detailed View of Three Types ofDetailed View of Three Types of Professionals: Workout Consultant
Presented by: Mark Rohman, Executive Director – Restructuring and Transaction ecto est uctu g a d a sact o
Advisory, Capstone Advisory Group
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Cost Cutting/ Operational Interim Operational Efficiency Management
Balance Sheet Restructure
Liquidity Crisis/ Cash
Management
Bankruptcy Preparedness p
and Filing
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Cost Cutting/Operational Efficiencies
When to Hire “At risk” company with solid management, yet ld b fit f t tti dcompany could benefit from cost cutting and process
improvement in areas such as inventory management, manufacturing processes, etc.
Role Identifies and analyzes business process risks and areas impeding performance Develops actionableareas impeding performance. Develops actionable
plan to improve performance and/or cut costs.
Type(s) of Consultant Typically Hired
Consulting firm with industry expertise
Consultant Usually Hired by:
Debtor
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Interim Management
When to Hire Crisis situations with lack of skilled, seasoned management and/or vacancies within management
that need to be filled on temporary basis to lead through crisis
Role Supplements management or replaces management
Type(s) of Consultant Typically Hired
Chief Restructuring Officer (“CRO”)Interim Management
Financial Advisory Firm
Consultant Usually Hired by:
Debtor
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Balance Sheet Restructure
When to Hire Profitable companies that are overleveraged and havelimited to no access to additional equity
Role Debtor-side: Develops business plan and restructuring alternatives. Negotiates with lenders and other
constituencies.Creditor-side: Conducts in-depth, independent review
of business plan and restructuring proposals. Negotiates with company and its advisors. Monitors
Debtor for lenders’ interests.Debtor for lenders interests.
Type(s) of Consultant Typically Hired
Financial Advisory Firm
Consultant Usually Hired by:
DebtorCreditorHired by: Creditor
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Liquidity Crisis/Cash Management
When to Hire Cash crisis is impending or anticipated in the near future.
Role Debtor-side: Manages and generates cash. Creates cash forecasting tools to aid in operations and
i ti ith l dcommunications with lenders.Creditor-side: Works with management to better understand liquidity status for the benefit of the
lenders
Type(s) of Consultant Financial Advisory FirmType(s) of Consultant Typically Hired
Financial Advisory Firm
Consultant Usually Hired by:
DebtorCreditor
Work Out Professionals
Situations Where Work Out Professionals Become Involved
Bankruptcy Preparedness and Filing
When to Hire Chapter 11 filing is potential strategy to effect balance sheet restructuring, asset sale and/or liquidation
Role Debtor-side: Secures DIP and exit financing. Develops and negotiates plan / asset sales. Manages
court mandated reporting and procedures.Creditor-side: Conducts in-depth, independent review
of business plan and restructuring proposals. Negotiates with company and its advisors. Monitors
Debtor for lenders’ interests.Debtor for lenders interests.
Type(s) of Consultant Typically Hired
Financial Advisory Firm
Consultant Usually Hired by:
DebtorCreditorHired by: Creditor
Work Out Professionals
Finding a Good Fit
What are the goals and objectives that you are trying to accomplish?
Do o need an objecti e point of ie or does o r borro erDo you need an objective point of view or does your borrower need advice/assistance in achieving the goals/objectives?
Is management capable of developing and executing a turn-around plan?
Do consultants relate with other professionals already engaged?
A lt t bl t i th fid f ti i t thAre consultants able to gain the confidence of participants on the debtor and the creditor side of the discussions?
Are there issues involved that may require a particular expertise or a restructuring firm with depth in the required specialties (fraud, specialized industries, affiliate transactions, government regulations, etc.)?
Detailed View of Three Types ofDetailed View of Three Types of Professionals: Outside Counsel
Presented by: Sherrill Johnson, SVP & S i C l Cit N ti l B kSenior Counsel, City National Bank
Selection and Role of CounselSelection and Role of Counsel
SelectionEarly attention to contemplated events in the engagement essential before selection of counsel to effect optimum result at best costRoles of inside legal department, account officerGeographic considerationsShould you have an “approved counsel” list?Should you have an approved counsel list?Selecting appropriate attorney(s), not just a firmFee arrangements/discounts/budgets
Selection and Role of CounselSelection and Role of Counsel
Role of counsel: Work with client to obtain result sought by client – it is the bank’s case!Potential areas of assistance from counsel in the collection process
Preparation of documents such as:Prenegotiation agreementsForbearances modificationsForbearances, modifications
Collection actions/ancillary remediesBankruptcySt tStrategyHiring of other professionals so that their work may be shielded from disclosure to the borrowerPeriodic reporting
Detailed View of Three Types ofDetailed View of Three Types of Professionals: Receiver
Presented by: Kenton Johnson, Executive Vice President, Robb Evans & Associates
LLCLLC
Receivers and ReceivershipsReceivers and Receiverships
Operating CompaniesOperating company receiverships typically are created when a court, upon the nomination of a plaintiff, appoints a receiver as an Equity ReceiverHowever, the receiver is a neutral party reporting to the court and primarily responsible for preserving the value of the assets until the underlying dispute is resolved
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Receivers and ReceivershipsReceivers and Receiverships
The Equity Receiver then imposes the jurisdiction or authority of the court over a company or an entity, including all its assets, records, operations, and the authority held by all the officers and directors of the entity.
This authority is especially useful when the company has been diverting assets, preparing fraudulent financial information, were seriously violating loan covenants or other document requirements
33
Rents, Issues, and ProfitsRents, Issues, and Profits
A Rent, Issues, and Profits receivership may seem similar because the appointed receiver is operating an income-property business and has replaced the owner or the officer of the entity that owns the propertyHowever, the Rent, Issues, and Profits receiver imposes the jurisdiction and authority of the court only over the income-producing property and the records relating to it. The receiver does not take control of the individual or entity that owns the receivership property and does not have any authority or control over other assets owned by the entity or individual th t th i hi tthat owns the receivership property
34
Consensual ReceivershipsConsensual Receiverships
Occasionally, an Equity Receiver is appointed in what is termed a Consensual Receivership. In these receiverships, the receiver may be nominated in the form of a stipulation by the plaintiff and defendantThe stipulation is usually agreed-upon to:
Save legal expenseProvide immediate reliable financial and asset informationPromote an efficient, speedy, and orderly liquidation of the plaintiff's collateral, andPromote the objectives of other agreements between thePromote the objectives of other agreements between the plaintiff and the defendant about the resolution of the dispute
35
Duties and Actions of the Equity iReceiver
Immediately the receiver should assume control of premises and assets, remove owners and other officers that have largely fueled the underlying problem, preserve and try to enhance the value of the business if it is operating, and preserve and
i t i th i i tmaintain the remaining assets
Control over all the business assets can best be accomplished by retaining the officers and employees who are not defendants and who have not consciously caused the underlying problem
36
Duties and Actions of the Equity iReceiver
The receiver must immediately determine if the business can be operated to produce enough cash to resolve and begin to repay delinquent and nonperforming loans that created the receiver's appointmentAt the same time, the Receiver must determine the realizable value of the assets (receivables, inventory, equipment, and intangibles) of the business, both as a going concern and in a li id ti iliquidation scenario.The Equity Receiver in a commercial receivership usually determines that non-performing loans cannot be cured and
i d b ti i th ti f i hi b iserviced by continuing the operations of receivership business that is either producing a substantial cash deficit or is hopelessly insolvent.
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Sale or Liquidation of AssetsSale or Liquidation of Assets
The receiver will recommend any of the following, depending on whether the operating or business portion of the receivership estate:
Can be sold as a going concern (usually the best resolution)Can be sold for an in-place value (second best scenario)Can be sold in large parts (the third best resolution)g p ( )Can be liquidated only by auction in small lots (unfortunately the most frequent and the least rewarding outcome))
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Completing the ReceivershipCompleting the Receivership
After selling or liquidating the assets of the receivership entity, the receiver would then prepare a Final Report and Accounting. In that report the receiver would recommend that the remaining net proceeds are distributed according to priority, and request th t t di h th ithe court to discharge the receiver.
In most receiverships, the receiver is obligated to prepare and file certain tax returns.
39
Documenting the Engagement
Presented by: Lance Jurich, Partner, Loeb & L b LLP& Loeb LLP
Documenting the EngagementDocumenting the Engagement
1. Battle of the Forms1. Battle of the Forms2. Key Provisions
A. ScopeA. ScopeB. IndemnificationC. Confidentiality
3. Important IssuesA. InsuranceB. Who’s Actually Doing the Work?C. Privilege
41
Battle of the FormsBattle of the Forms
Often, banks and outside professionals will both have pstandard engagement forms they prefer to use.Whose form is used often depends on the parties’ bargaining powerbargaining power.Sometimes, especially with professionals from large companies, the professional a lender seeks to engage ma ha e little or no fle ibilit in sing a form other thanmay have little or no flexibility in using a form other than their own, or in making changes to their form.If you must use the engagement form of the outside professional, in-house attorneys or outside counsel should review the proposed agreement with specific attention to key provisions.
Key Provisions: Scope of EngagementKey Provisions: Scope of Engagement
What will they do for you?y yThe engagement agreement should specify exactly what it is the outside professional is expected to deliver or perform.pWritten report (how many copies?), oral findings (often cheaper), is the professional expected to testify or is litigation likely?
What will you do with their work product?Internal use only?Shared with co lenders potential participants orShared with co-lenders, potential participants, or borrower?Used for litigation purposes?
Key Provisions: IndemnificationKey Provisions: Indemnification
Many outside professionals include sweeping indemnification provisions in their form that would have the bank assume full liability for the work performed for the bank:
Key Provisions: ConfidentialityKey Provisions: Confidentiality
Confidentiality concerns arise as to the work product of your id f i l d l i f i i foutside professional, and also to information you receive from
your borrower that you may be sharing with your outside professional.Lenders want written assurances from the professional that theLenders want written assurances from the professional that the professional will not share this information with others (subject to legal requirements to disclose).Confidentiality provision need not be elaborate, and can be y p ,included in the engagement agreement itself, or executed as a separate agreement.Example of language to include in engagement:
“It is imperative that you do not discuss your value conclusions or delivery dates with anyone but Bank or its counsel or in any way provide any information of a confidential nature regarding the property, that was provided to you by Bank or its counsel , to any p p y p y y yother party.”
Important Issues: InsuranceImportant Issues: Insurance
Your outside professional may be conducting site p y gvisits, and creating work product could affect the interests of your borrower or third parties. This could expose both the lender and the outside professionalexpose both the lender and the outside professional to litigation risk.The lender should confirm that outside professionals carry insurance that would cover potential suits relating to their involvement.At the very least the lender should inquire as to theAt the very least, the lender should inquire as to the amount and type of insurance coverage.
Important Issues: Who’s Actually Doing the Work?p y g
Senior professionals (appraisers, environmental lt t ) t i ll i fi l t b t h fconsultants) typically sign final reports, but much of
the work that goes into a report is routinely completed by junior staff.Thi i ft fi b t i t i it ti h ldThis is often fine, but in certain situations you should be clear on exactly who is doing what aspects of the assignment – particularly if testimony is possible.If a valuation expert might be called to testify you willIf a valuation expert might be called to testify, you will want to make sure the person testifying actually did substantial work on the report, and visited the property and comps they will testify about Knowproperty and comps they will testify about. Know who this person will be, their work experience, and their testifying experience.
Important Issues: PrivilegeImportant Issues: Privilege
If you anticipate a litigation, you should consider y p g , yhaving your outside counsel engage the expert.
If you don’t like the results of the report, attorney/client privilege could shield the report from discoveryprivilege could shield the report from discovery
If expert is designated, all communications with expert are fair game.Can one shield all expert findings by having experts hired by outside counsel?Sh i t t t f ilit t ttl tSharing expert report to facilitate settlement negotiation without waiving privilege.
Developing relationships with aDeveloping relationships with a range of professionals
Panelists
Questions?Questions?
Appendix: Types of Professionals
ValuationA i th b k d i l l ti f i t i tAppraisers - the bank needs an appraisal or valuation of equipment or inventory as a going concern or in liquidation.
Real Estate: SFR, CRE, special purpose, income property, land
k t/li id ti /d kmarket/liquidation/dark, with or without personal property (car wash), CRE: market approach (owner user) vs income approach (financial investor)
Equipment: forced vs orderly, gross vs net
Inventory: by SKU, forced vs order, gross vs net, treatment of ineligible
Examiners - the bank needs an examination of the support for asset-based lending including confirming the quality and quantity of Accounts Receivable, the quality and condition of the accounting system, and the overall financial health of the borrower.
Asset based lending (accounts receivable, inventory)Environmental consultant
Appendix: Types of Professionals
LiquidationCollection AgencyCollection Agency
No assets, cost, termLiquidator
Liquidators to sell foreclosed equipment or other specialized assetsEngaged by borrower or lender
Keeper/MonitorOn-site to collect proceeds of collateral
Property managerThe bank may need a qualified property manager for foreclosed income, commercial, or other specialized propertyspecialized propertyAfter OREO
Assignee (Assignment for Benefit of Creditors)Requires borrower to assign assets to the assignee to effectuate liquidation/transfer
Trustee (foreclosure/trustee sale)Non-judicial foreclosure
Repo specialist (vehicles)Repossess, store and auction vehicles
Real Estate Sales AgentsSpecific real estate agents to sell foreclosed residential income commercial or otherSpecific real estate agents to sell foreclosed residential, income, commercial, or other specialized real property
Skip/Trace Asset Search
Appendix: Types of Professionals
Consultants - an experienced, qualified consultant is needed by the borrower to evaluate operations provide turnaround assistance including restructuring the balance sheet andoperations, provide turnaround assistance including restructuring the balance sheet, and generally assisting the borrower with the resolution process. Because of legal restrictions, and to avoid potential lender liability, bank personnel cannot attempt to provide these services. An experienced, qualified consultant is needed by the bank to review and evaluate the operations of a business and its assets against current industry standards, and to review and evaluate the industry in which the business operates.
Operations (industry expertise needed)Consultant with expertise in running a company, with emphasis on industry experience, experience in the problem area (logistics, efficiencies, employee
l ti t )relations, etc)Turnaround/workout
Consultant who can identify crisis, manage cash, implement management reporting improvements, guide borrower
B l h t t t ( ti t ith ll th dit )Balance sheet restructure (negotiate with all the creditors)Consultant who has ability to negotiate with potentially conflicting parties in interest, restructure the balance sheet in a fair and equitable manner & possibly raise new capital (debt or equity)
Consultant to lender group (eyes & ears)Consultant to lender group (eyes & ears)More usual in agented bank groups.
Consultant to borrower (guide through the process)Consultant engaged by borrower to advise it
Appendix: Types of Professionals
Outside CounselW k t/b k tWorkout/bankruptcy –
the bank needs an experienced outside attorney to assist with pre-negotiation arrangements and workout, restructure, or settlement discussions with a borrower. Knows the bankruptcy code inside & out; knows the other professionals andKnows the bankruptcy code inside & out; knows the other professionals and works well with them; can handle negotiations or litigation; develops creative solutions
Transactional (sale of assets/business/negotiated restructure, etc) –There may be complicated transactions to document including the sale or releaseThere may be complicated transactions to document including the sale or release of assets.Expertise in documentation; staffed with paralegals, associates and partner; perfection of security interest; review and clean-up of prior docs
FraudMaintain attorney/client privilege; assist in determining extent of fraud; engage forensic CPA
Appendix: Types of Professionals
Outside CounselC ll ti /j d t/ f tCollection/judgment/enforcement –
The bank may need specialized attorneys or collection agencies to pursue collection of charged off assets or to enforce judgments, or file an action to complete a judicial foreclosure to recover an expected deficiencyInexpensive; focused on filing suit obtaining judgment filing & enforcingInexpensive; focused on filing suit, obtaining judgment, filing & enforcing judgment lien; handle many small loan. More expensive firm often used for larger, more complex collection suits.
Liquidation (UCC foreclosure sale)Files notice and assists with sale of personal property asset to a buyer; often withFiles notice and assists with sale of personal property asset to a buyer; often with borrower’s cooperation
Judicial foreclosureTo accomplish foreclosure in states that do not allow a non-judicial foreclosure, or where the one form of action is an issue in California
Specialized industry or issue counselIf the proposed engagement is complex, or is related to an unusual industry or task, or involves specific regulation such as ERISA, HIPPA, or gambling operations, the bank may need to locate and hire attorneys specifically experienced and qualified to review the proposed agreement or contract.
Appendix: Types of Professionals
ReceiverTh b k d it i h d t id tt ith b 'The bank and its in-house and outside attorneys may agree with a borrower's recommendation that it complete an Assignment for the Benefit of Creditors using a qualified and independent assigneeThe bank and its in-house and outside attorneys may decide to file a motion with the court to appoint an independent receiver if it is determined that a borrower is divertingcourt to appoint an independent receiver if it is determined that a borrower is diverting assets, or preparing fraudulent financial statements, or grossly violating loan covenants or other borrowing requirements
FraudSale/management of assetsgConsensual, stipulated appointment Non-consensual appointment