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Top 10 Issues:
Debtor Companies and
Customers of Debtor Companies
Eric SchultenoverWaller Lansden Dortch & Davis, [email protected]
Kevin W. Crumbo Kraft CPAs – Turnaround & Restructuring Group
Top 10 Issues for Customers of Debtor Companies
1. Continuity of Supply
Top 10 Issues for Customers of Debtor Companies
2. Support or Resource?
Top 10 Issues for Customers of Debtor Companies
3. Support – How to Support
– Enhance credit to Supplier
– Purchase plants or operations from Supplier
– Debtor in possession financing
• What is it?
• Credit Bid
Top 10 Issues for Customers of Debtor Companies
4. Support – Where to Support
– Inside of Bankruptcy
– Outside of Bankruptcy
• Access Agreements
• Segregation and Tagging of Tools, Equipment, Capital, Inventory, Raw
• Tooling Acknowledgements
• Purchase options
Top 10 Issues for Customers of Debtor Companies
5. Support – When to Support
– Cost-benefit analysis
– Viable restructuring opportunity?
• Is this merely a financial issue or is it structural and operational
Top 10 Issues for Customers of Debtor Companies
6. Resource – Ability to Resource (long-term “executory” contract v. no contract)
– Has there been a breach?
– Lead time for resourcing?
– Treatment of Executory Contracts in Bankruptcy
Top 10 Issues for Customers of Debtor Companies
7. Resourcing Assistance – What do you need?
– Access
– Tools, Equipment, WIP, Raw
– Support
– Intellectual Property
Top 10 Issues for Customers of Debtor Companies
8. Anti-trust
Top 10 Issues for Customers of Debtor Companies
9. Customer programs and warranty issues during bankruptcy case
Top 10 Issues for Customers of Debtor Companies
10. Speed
Top 10 Issues for Debtor Companies
1. Restructure or Liquidate
Top 10 Issues for Debtor Companies
2. Pre-bankruptcy planning– Preserve cash– Build inventory – Engage primary creditors (typically
secured)– Arrange DIP financing– Consider pre-packaged bankruptcy
• Often financial restructuring
Top 10 Issues for Debtor Companies
3. Liquidate- Orderly wind down or Chapter 7?
Top 10 Issues for Debtor Companies
4. Financing– Debtor-in-possession financing
Top 10 Issues for Debtor Companies
5. Trade Creditors and Customers– Critical vendors– Customer programs
Top 10 Issues for Debtor Companies
6. Chapter 11 - Sale as a going concern or plan of reorganization?
Top 10 Issues for Debtor Companies
7. Sale – 363 sale process
Top 10 Issues for Debtor Companies
8. Plan of Reorganization under 1129
Top 10 Issues for Debtor Companies
9. Employees – Collective Bargaining Agreement?
Top 10 Issues for Debtor Companies
10.Exit Issues– Exit financing– Customer issues – warranty claims
