1:30 – 2:30pm DebtQuity: The Sobering Reality of Recharacterization & Equitable Subordination

Moderator:
Michael Cavan, CIRA, Huron Consulting Group

Speakers:
Ronald Greenspan, CIRA, FTI Consulting Inc.
Mette Kurth, Sheppard, Mullin, Richter & Hampton LLP
Steve McGill, Markwood Capital
Stephen Hinrichs, Bank of America Business Credit

Description:
Due to hyper-liquidity, the market has seen vast infusions of so-called “DebtQuity” - equity and covenant-light competitive debt - layered onto companies. Given this proliferation of DebtQuity, recharacterization and equitable subordination actions are likely to become increasingly prevalent, and the traditional tests used by the courts to distinguish between the two are increasingly unrealistic. In the brave new world of overleveraged companies, this is likely to join preferences and fraudulent conveyance claims as a significant avenue of recovery for the truly unsecured.

2:45 – 3:45pm Who Is Picking Up the Tab? Valuation Fights in the Next Wave of Restructurings

Moderator:
Gregory A. Bray, Milbank, Tweed, Hadley & McCloy LLP

Speakers:
Gary Wilfert, CIRA, Storm Industries Inc
Eric Swanson, Silver Point Capital
Tracy Gopal, CIRA, GCA America
John Beauclair, Sun Capital Partners, Inc.

Description:
Recent years have seen an attractive capital market [or - a seemingly endless supply of capital] driving leverage and valuations to record highs while increasingly creative forms of capital have been deployed to refinance and purchase companies. But today’s corrections in the liquidity market have many wondering what will happen to these highly leveraged and creatively financed companies if they are faced with the specter of restructuring. How should these companies be valued in today’s environment? And for companies that have been overvalued, how do you divide up the pie amongst the various tranches of debt and equity? The panelists will discuss their views on these topics and share their experience with noteworthy current cases in order to provide insight into how bankruptcy courts and other parties have reacted to these and other valuation questions.

4:00 – 5:00pm Tax Implications of Cashless Restructurings and the Issuance of "DebtQuity" - Type Instruments

Moderator:
Mark S. Wallace, Stutman, Treister & Glatt P.C.

Speaker:
Nicole Horton, Macquarie Securities (USA) Inc.
Francis Zuniga, Phelps Consulting Group
Robert Tormey, Tatum LLC

Description:
What are the tax consequences to creditors when they exchange straight debt for equity, PIK paper or “DebtQuity” in a cashless restructuring? Have they marched themselves into a tax trap in which they recognize no loss on the exchange but instead must report phantom original issue discount income – income without cash -- year after year until the instrument is retired? This panel will examine the pitfalls of a cashless restructuring for unwary creditors and will consider tax planning countermeasures aimed at obtaining a better overall tax result for the parties in interest.

5:00 – 7:00pm Networking Reception