2015 VALCON, 2013

The federal code (and similarly state law) define "insolvent" as a "financial condition such that the sum of [the] entity's debts is greater than all of [the] entity's property, at a fair valuation..." 11 U.S.C. § 101(32)(A). Fair valuation is not defined in the bankruptcy code. How does fair valuation for solvency differ from fair market value which is used for valuation for income tax purposes? Or fair value which is used in shareholder oppression matters?

An overview of the chapter 9 process, why municipalities do or do not file for chapter 9 protection, and the financial liabilities municipalities face, including bond debt, budget shortfalls, unfunded pension liabilities and costly union contracts. The discussion includes methods for restructuring bond debt under a plan of adjustment, issues related to general obligation bonds and special revenue bonds, how such claims are treated under Chapter 9, and related plan confirmation and valuation issues.

A bankruptcy reorganization or out-of-court restructuring can significantly impact tax attributes such as NOLS and basis. The existence of and ability to use such attributes after a reorganization or restructuring often affects value. Two common issues must be considered with regard to a transaction’s impact on such items: the reduction of tax attributes and limitations on the ability to use tax attributes. The topics addressing absorption of tax attributes include discharge of indebtedness income, attribute reduction, stock-for-debt exchanges, debt modifications and elections.

Albert Gallatin was the longest-serving U.S. Secretary of the Treasury (1801-1814) and came into office as a professed anti-Federalist, ardent proponent of fiscal responsibility, and vocal opponent of Alexander Hamilton’s financial policies. However, Gallatin failed to accomplish the Jeffersonian objectives of shrinking the national debt and eliminating taxes, as he was forced to finance a war with Great Britain and the purchase of the Louisiana territory. Gallatin also supported the First Bank of the United States and proposed federally financed infrastructure projects.

An in-depth discussion from the front lines of distressed investing, with multiple perspectives on how deals and decisions are made. The issues and outcomes for real companies are addressed from the perspectives of judge, financial advisor, debtor and distressed investor.