Be Prepared for What Comes Next
Our economy enjoyed an upswing for so long that workout and bankruptcy training might not have been a top priority for many lenders. But with increasing talk of a recession, understanding the fundamentals of workouts and bankruptcies is a necessary skill. Are you prepared?
To prepare secured finance professionals for managing distressed credits and understanding workout strategies, SFNet has developed a new education series that takes a deep dive into this timely topic.
Pricing Series Bundle (includes all 5 modules)
$0 Member Price
$520 Non-Member Price
Pricing Single Module
$0 Member Price
$130 Non-Member Price
Workouts:
Preparing for a Workout
Instructor: Marshall Stoddard, Partner, Morgan Lewis
As a workout of an ABL loan emerges, what are the initial steps to be taken by the portfolio team:
- Is there a default?
- Are we in dominion?
- Where are we on availability/dilution/collateral values/general creditworthiness?
- Review the credit request and approval. Are there variances from it? Is this a company problem or endemic to its industry?
- What was the initial exit strategy? Has it changed? What are the alternative strategies, both legal and business?
- Is there any wrongdoing?
- Assessment of management under the circumstances?
- Is there the need for a legal review?
- Develop a long-term strategy before taking short-term steps.
- Get the portfolio team and all decision makers on board with the strategy.
Management of Distressed Credits
Instructor Don Rothman, Partner, Riemer & Braunstein
- We will be exploring the following topics at a level geared for loan officers who have not been through an economic downturn previously:
- We will discuss what a workout actually is, and the different types of defaults and/or events that can cause a loan to be considered a "workout," particularly in the age of COVID-19.
- We will discuss the basic steps to handling a workout, including due diligence, identifying the lender's goal/strategy, notices, forbearance and modification agreements and enforcement of rights.
- We will cover some common pitfalls for loan officers to be aware of.
- We will cover some basic rules to avoid lender liability.
Workout Budgeting
Instructor: Pat Diercks, Partner, Clear Thinking Group
This discussion will introduce the 13-week cash flow and liquidity forecast as a fundamental component of projecting/monitoring both company operating performance and collateral values while the borrower is in workout, including:
- Critical components in the preparation of a 13-week cash flow and liquidity forecast
- Validation and ‘testing’ of projections for reasonableness
- Key company operating metrics
- Borrowing base metrics
- Risk mitigation/collateral protection steps
- Sensitivity analysis to project risk profile
In This Section
Bankruptcies:
Bankruptcy Fundamentals for Lenders
Instructor: Don Rothman, Partner, Riemer & Braunstein
This discussion will introduce you to critical bankruptcy concepts like the automatic stay that prevents all enforcement efforts upon the filing of a bankruptcy, the requirement that debtors provide lenders with adequate protection for the use of their collateral during a bankruptcy case, and how a debtor’s attempt to cram down a plan of reorganization over a lender’s objection. It will also provide answers to the following questions that lenders face in a borrower’s bankruptcy:
- What are borrowers hoping to accomplish with a bankruptcy and how will those goals affect your loan and the underlying collateral?
- What are the key disputes lenders face at the outset of a bankruptcy and in the plan confirmation process?
- What litigation risks do lenders face in bankruptcy?
- What steps can you take now to put your loan and underlying collateral in the best possible position in advance of a bankruptcy filing?
Creating a DIP/Bankruptcy Budget
Instructor: Pat Diercks, Partner, Clear Thinking Group
Chapter 11 cases come in many shapes and sizes and involve companies in every industry and sector of the economy. A key component common to nearly every bankruptcy case: developing an acceptable budget that will serve as the lifeblood of estate administration. We will discuss the transition of a 13-week cash flow and liquidity forecast into a DIP budget and the necessary considerations specific to bankruptcy, including:
- Intended outcome of the filing (liquidation, reorganization, 363 sale)
- Timing/priority order of payments post-petition
- Collateral monetization
- Carve outs for professional fees and other administrative expenses
Bundle:
Get the Full Series
Purchase all 5 modules in the SFNet Workout & Bankruptcy Series:
- Preparing for a Workout
- Loan Officers Workout Playbook
- Workout Budgeting
- Bankruptcy Fundamentals for Lenders Operating in a Turbulent Climate
- Creating a DIP/Bankruptcy Budget
Series bundle offers a significant discount over the single session price:
Cost is $0 for Members and $520 for Non-Members vs. $0-$130 for each course in the series
All training modules are on-demand and feature bankruptcy attorneys and turnaround professionals who delve into highly relevant, real-world examples. Class participants will have access to instructors to ask specific questions via SFNet’s online discussion group.