Kai Zeng and Kon M Asimacopoulos, Kirkland & Ellis

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

The purpose and role of ad hoc committees from a debtor’s perspective: the initial phase

Yushan Ng and Helen Ward, Cadwalader Wickersham & Taft

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

Chris Howard, Sullivan & Cromwell

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

The relationship of an ad hoc committee with its stakeholder constituency

No power to bind: the importance of the underlying finance documents in relation to decision making

Nick Angel, Peter Newman and Edward Rasp, Milbank LLP

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

Role and powers

Yen Sum and Lucy Cox, Sidley Austin

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

How many committees?

In a capital structure involving multiple external debt tranches, one of the first questions that arises is the number of committees that will be required.

When a defaulted borrower files a bankruptcy petition, two important events occur: (1) a bankruptcy “estate” comprised of certain assets of the debtor is created; and (2) all collection efforts (and pending litigation) against the debtor or its assets are automatically stayed. Accordingly, the court’s determination of whether items are or are not property of the debtor and of the bankruptcy estate is of critical importance to the creditor’s ability to collect on its debt.

On October 11, 2016, the United States Supreme Court granted certiorari in the matter of Johnson v. Midland Funding LLC, on appeal from the Eleventh Circuit Court of Appeals, in order to resolve whether a conflict exists between the Fair Debt Collection Practices Act (“FDCPA”) and the Bankruptcy Code. In Midland Funding, the appellate court found a debt collector to have violated the FDCPA by filing a proof of claim on time-barred debt in a Chapter 13 bankruptcy.

The Consumer Financial Protection Bureau has issued yet another suite of regulatory changes related to mortgage servicing. The rules add additional protections for borrowers—and therefore increased requirements for servicers—as well as clarify certain issues that have been the subject of questions and confusion by servicers.

Final Servicing Rule

Michigan Court Rule 2.622 (the “Receivership Rule”) governs the appointment of receivers. The Receivership Rule was amended in 2014 to provide more explicit guidance on what courts and attorneys should consider when nominating a receiver. Specifically, the 2014 amendments addressed concerns that trial courts were disregarding qualified nominations made by the parties to the litigation in favor of judicial discretion in appointing a disinterested party to maintain the receivership estate.

A Supreme Court ruling this week should give creditors a powerful tool to collect their debts from debtors who try to transfer assets before seeking bankruptcy protection. The primary reason an individual may turn to personal bankruptcy is to protect assets from creditor collection while obtaining a “discharge” from debts. Such protection is increasingly necessary where an individual is being pursued by one or more creditors, particularly where those creditors may have obtained (or are about to obtain) judgments against the individual.