Cash is King: Sustaining Your Enterprise During the Downturn
presented by John Doyle
Businesses are looking down the road to what they hope is a time of revived economic activity, increased customer demand, and improved capital markets.
For now, that road needs to be paved with cash. Companies are increasingly focused on cash flow as they cope with lower revenue, reduced credit availability, and growing vendor demand for faster payment. Three-quarters of the 1,600 participants in a recent Deloitte Dbriefs webcast poll said they were more concerned about their company’s cash position than they were a year ago.
That concern is well placed. Over the next several years cash management will be more important to companies’ survival than it has been for decades, especially those businesses that have relied heavily on credit to operate and grow during economic expansion. Weak demand will constrain revenue. Tight lending terms will continue to dampen borrowing. Regulators will be keeping an extraordinarily close eye on the health and performance of businesses.
In these circumstances it is vitally important for companies to realistically assess their liquidity and strengthen cash-management programs, particularly those businesses anticipating merger and acquisition activity.
Tax Considerations in a Distressed Economy
presented by Daniel Maher
Distressed Companies: Fixing the Balance Sheet
Existing capital structure no longer sustainable
• Requires new equity, restructured debt, major asset sales
Transactions executed to address long-term issues
• OPEB funding
• Environmental liabilities
• Gain or loss on exchange
• Cancellation of debt income
• OID, AHYDO, and other unpleasant acronyms
Preservation of Valuable Tax Attributes: NOL’s,Tax Credits, Tax Basis
• Sections 382 / 384
• State and local taxes
Bankruptcy: The Final Solution (Hopefully)
All of the above issues in III, but under court supervision, and with a number of
additional twists and turns
Acquiring Distressed Assets
presented by Jerald I. Ancel
There are a number of advantages to acquiring assets from a bankruptcy estate. This presentation focuses on the advantages of purchasing distressed assets and the legal issues a potential purchaser must understand to maximize the utility of the transaction. The presentation will involve a discussion of the process by which a purchase may acquire distressed assets and the scope and finality of a federal court order entered pursuant to Section 363 of the Bankruptcy Code. Finally, the presentation will focus on limitations on the "free and clear" nature of a sale imposed by a number of jurisdictions.
Managing Relationships with Financially Distressed Vendors and Customers
presented by W. Timothy Miller
In the current economic climate, business must develop strategies to manage their relationships with customers who are or may soon be insolvent. This presentation focuses first on strategies for improving the business's position through varied credit terms and enhancements. The presentation will involve a discussion of statutory lien rights, remedies under the Uniform Commercial Code, and steps a company can take to understand their exposure if a customer files for bankruptcy protection. Finally, the presentation will focus on critical activities a company should undertake if a customer files for bankruptcy protection, including timely filing claims in the bankruptcy case, defending preference actions, and moving to compel assumption or rejection of executory contracts.
Reality Therapy-a Businessperson’s Perspective
presented by David Hamernik
The environment for operating a distressed company in a depressed economy requires tough decisions when options are limited. Being prepared to make the tough decisions requires having a clear objective, and understanding the alternatives and having the tools to make the best decision. Dave Hamernik will discuss what the process requires; and executing the strategies to achieve the intended objective.
Panel Discussion on “Capitalizing on Opportunities in An Economic Downturn” and Audience Question and Answers
presented by John Doyle, Daniel Maher, Jerry Ancel, Tim Miller, and David Hamernik
The Panel Discussion will focus primarily on opportunities in the economic downturn and practical ways to manage a company's risk. The panel will encourage an interactive discussion and will provide answers to audience member's questions regarding sustaining sufficient cash flow for their businesses and managing relationships with financially distressed customers and vendors. The discussion will also focus on tax considerations for businesses in the current economic climate and opportunities to acquire distressed assets.