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Workout And Bankruptcy: Pitfall And Opportunity
Presenters: Kenneth L. Cannon II Penrod W. Keith Michael F. Leavitt Room: Entrada C
I. Alternatives in Uncertain Times: Workouts and Avoiding Bankruptcy - - A large percentage of business bankruptcies end in liquidation. It is sometimes prudent, if possible, to avoid bankruptcy. Alternatives to Bankruptcy include restructuring debt, forbearance agreements, workout agreements and state law remedies – assignment for the benefit of creditors. II. Filing for Bankruptcy - - The panelists will discuss the reasons for and benefits in filing bankruptcy. They also will discuss concepts central to bankruptcy cases including bankruptcy discharges, the automatic stay, priority of claims, the treatment of contracts in bankruptcy, avoidance powers, effect of bankruptcy on insiders and principals including concepts relating to co-debtors and guaranteed debt. III. Bankruptcy Opportunities - - The ultimate goal in Chapter 11 is to confirm a plan of reorganization that either provides for the restructuring of debt or for the sale of the business or liquidation of the assets of the debtor. In this process there are opportunities for debtors and creditors alike. The panelists will discuss the reorganization powers and what a debtor may do to restructure its debt including secured debt. They will also discuss the process of disposing of assets in bankruptcy especially the bankruptcy sale process - - a process which allows assets to be sold free and clear of liens and encumbrances. IV. Bankruptcy and Workout Pitfalls - - An unprepared or unwary debtor or creditor may face difficulties in the bankruptcy process. The panelists will discuss concepts of concern to creditors including relief from stay issues, collecting debts against bankruptcy entities, filing proofs of claim and preserving claims, bankruptcy litigation and equitable concerns. Of concern to both debtors and creditors are certain equitable principles which are at the disposal of the bankruptcy court and trustees including principles of equitable subordination of debt (when a creditor’s debt may be shifted in priority), alter ego and substantive consolidations (when parties other than a debtor may be drawn into a bankruptcy case), equitable recharacterization of debt (when debt is treated by bankruptcy courts as equity interests) and the bankruptcy court’s ability to do the unexpected. V. Summary and Question and Answer.
Kenneth L. Cannon II is a shareholder and Chair of the Bankruptcy and Creditors' Rights Section of the law firm of Durham Jones & Pinegar. He joined the firm’s Salt Lake office in 2003, after practicing many years with a national law firm. He specializes in corporate reorganizations and debtor-creditor law. He has represented debtors, secured and unsecured creditors, creditors committees, shareholders, and trustees and examiners in substantial workouts, Chapter 11 reorganization cases, and Chapter 7 cases. He has advised clients with respect to bankruptcy issues in a variety of commercial transactions including securitization of assets and structured financings and has issued critical opinions related to those transactions. Mr. Cannon also has acted as a mediator in the resolution of substantial disputes. He has been appointed to several federal court committees, and currently serves as chair of the Local Rules Committee for the United States Bankruptcy Court for the District of Utah. For a number of years, he was an adjunct faculty member at J. Reuben Clark Law School at Brigham Young University where he co-taught debtor-creditor and Chapter 11 reorganization courses. He has served on the Advisory Board of the Rocky Mountain Region of the American Bankruptcy Institute. He has been listed amongst The Best Lawyers in America (over 10 years), Mountain States Super Lawyers, and the “Legal Elite” by Utah Business magazine. Mr. Cannon has published articles and is a frequent lecturer at seminars on a variety of bankruptcy topics and has contributed chapters to leading bankruptcy treatises. He received his J.D. degree, cum laude, from BYU and is a member of the Order of the Coif. He also received a B.A. from BYU, summa cum laude, and an M.A. from BYU in American History. In 1985, Mr. Cannon served as a senior Fulbright Scholar at the University of Helsinki where he conducted research on Scandinavian insolvency law. Penrod W. Keith is a shareholder and member of the Bankruptcy and Creditors' Rights Section at Durham Jones & Pinegar. Like his partner and fellow presenter, Ken Cannon, he joined the firm’s Salt Lake office in 2003, after practicing many years with a national law firm. He has over 20 years of full time bankruptcy experience. His practice focuses on bankruptcy and creditors' rights matters. He received his J.D., magna cum laude, in 1986 from BYU and is a member of the Order of the Coif. He received a B.A. in University Studies in 1983 from BYU. He served as a contributing editor of two of the top treatises on bankruptcy, Collier on Bankruptcy and Norton Bankruptcy Law and Practice. He is a member of the American Bankruptcy Institute and the Utah Bankruptcy Lawyers Forum. He has published a number of articles and is a regular lecturer on bankruptcy related matters. He has been listed amongst The Best Lawyers in America, Mountain States Super Lawyers, and the “Legal Elite” by Utah Business magazine Michael F. Leavitt is a senior associate in Durham Jones & Pinegar’s St. George office. Mr. Leavitt’s practice focuses on general civil litigation, including collections, mechanic’s lien foreclosures, real estate disputes, business litigation, and representation of creditors in bankruptcy. He is President of the Southern Utah Bar Association where he is actively involved with the Southern Utah Community Legal Center. He has presented at multiple state bar meetings on construction litigation and mechanic’s liens, including the Utah Residence Lien Recovery Fund. He received his J.D. from the University of Idaho College of Law in 2002, where he was an editor and executive board member of the Idaho Law Review. He received a B.A. in History, magna cum laude, from Southern Utah University in 1998, and an A.A. degree, cum laude, from Dixie State College in 1996. He is listed amongst the “Legal Elite” by Utah Business magazine for 2009.