NACM Oregon
Business Credit Journal June 2012
A monthly newsletter published by NACM Oregon
In This Issue BAPCPA Revisited, Part II........ 1 Chair’s Message...................... 2 President’s Message................ 2 Member Profile....................... 3 Legal Corner........................... 5 Collection Corner.................... 8 International Corner................ 11 Lifetime CCE........................... 12 NOF Scholarship Funds............ 12 BCLC Webinars....................... 13 Education Schedule................. 13 Contacts................................. 16
BAPCPA Revisited: A Three-Part Series Analyzing Retail Restructurings Before BAPCPA, Since BAPCPA, and the Future of Retail Bankruptcies Under the Bankruptcy Code by Lawrence C. Gottlieb, Brent Weisenberg, and Michael Klein
This article is Part 2 in a three-part series analyzing the impact of the 2005 amendments to the Bankruptcy Code, commonly referred to as “BAPCPA” on the ability of bankrupt retailers to utilize the Chapter 11 process to successfully restructure their affairs. Part 1 of this series highlighted the major changes to the Bankruptcy Code enacted by BAPCPA. In this piece, we will analyze the impact of the BAPCPA amendments on retail reorganizations.
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t is our experience that BAPCPA’s numerous amendments and modifications to the Bankruptcy Code have profoundly impacted the Chapter 11 process to the point that it is nearly impossible for retailers to reorganize regardless of the prevailing national and international economic conditions. Time and again in the seven years since its enactment, we have observed that BAPCPA has significantly impaired the ability of retailers to obtain the necessary postpetition financing and breathing room from creditors to test and implement a reorganization strategy, regardless of the debtor’s capital structure, the fluctuating state of the credit markets, or the extent to which they compete with large discount retailers like WalMart or online retailers like Amazon. As a result, retail cases over the past seven years have invariably taken one of two forms: either the case is
filed as a liquidation or the debtor is given a small window within which to conduct a going concern sale under section 363 of the Bankruptcy Code that typically generates enough value only to satisfy administrative and secured creditors. As is discussed below, which path cases take often turns on the timing of the bankruptcy filing relative to the all-important Christmas shopping season. Undue Constraints on Retailers As noted in Part 1 of this series, BAPCPA’s amendments have significantly constrained the ability of retail debtor’s to reorganize. Among
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