Letter from the President

Over the past several columns I have discussed AIG, Baer Stearns, Lehman Brothers, Freddie Mac, Fannie Mae, Washington Mutual, the sale of Wachovia, the auto bailouts which are now turning into the auto bankruptcies, and Bernie Madoff. We can add the General Growth Properties, Inc. bankruptcy filings to the list of recent significant developments as this is the first of the its kind which may test the separateness of the owning entities in practice, not theory.

One of the realities of current practice is that not all business can be reorganized and not all going concern value can be preserved. The paradigm of ready buyers being willing to invest in a company through a Section 363 sale, and others being willing to provide debtor in possession financing, has rapidly become the exception, not the rule. In some the recent cases the extreme pressure Courts are under to find ways to provide financial lifelines has breathed new life into the old practice of cross collateralization, in the context of a roll over, which is being allowed to be used to enable DIP lenders, willing to put their money where their money already is, to obtain a post-petition seniority for their old money.

These issues are going to be addressed as part of the AIRA’s Annual Breakfast at the National Conference of Bankruptcy Judges in October, 2009. The Breakfast Panel will discuss turning the lights out when the party’s over. The use of various approaches to closing a business including bankruptcy, assignments for the benefit of creditors, self-directed liquidations, and simply shutting the doors, will be explored by an experienced and outstanding group of professionals. Consistent with the parallel track at the AIRA Annual Seminar on the Small Business – Middle Market, this practical program will address what many of us are really dealing with on a day to day basis.

In the interest of full disclosure, the idea for this program was procured (without fee) from Thomas Moers Mayer of Kramer Levin Naftalis & Frankel LLP in New York. A special thanks is due Tom for his engaging and vibrant intellect, and willingness to share it with the AIRA.

Author Bio:

Grant Stein is a partner in Alston & Bird’s Bankruptcy, Reorganization and Workouts Group. His diverse practice includes the representation of debtors, secured and unsecured creditors, creditors’ committees, and fiduciaries in complex and difficult out-of-court workouts, debt restructurings, bankruptcy cases, and financial transactions throughout the United States and internationally. He also regularly represents officers, directors, and other parties in bankruptcy litigation of all kinds. His restructuring experience includes manufacturing, real estate, wholesale, retail, distribution companies, health care, communications, technology and intellectual property issues.

Mr. Stein is a Fellow of the American College of Bankruptcy and is identified as a top practitioner in Chambers USA: America’s Leading Lawyers for Business, The Best Lawyers in America and Super Lawyers magazine. He serves as a director and president-elect of the Association of Insolvency and Restructuring Advisors (AIRA). He also is a director and president-elect for the Southeastern Bankruptcy Law Institute. He recently served as a Member of the executive committee of Emory University’s Board of Visitors. He has written numerous articles on bankruptcy and workout issues and regularly lectures around the country. Mr. Stein served as law clerk to The Honorable W. Homer Drake, the senior judge of the United States Bankruptcy Court for the Northern District of Georgia, following his graduation, with honors, from the University of Georgia School of Law in 1981. He received his B.B.A., with high honors, from Emory University in 1978.