Robert J. Gayda is counsel in the Bankruptcy and
Corporate Reorganization Group of Seward & Kissel
LLP. He has practiced law since 2004 and joined
Seward & Kissel this year. Over the course of his career,
Gayda has represented a diverse clientele in all aspects
of restructuring. This includes creditors’ committees, a
court-appointed examiner, lenders and lender groups,
special committees, investors, and individual creditors
in both out-of-court and in-court restructurings.
Michael Tenenhaus is an associate in the Bankruptcy
and Reorganization Group at Seward & Kissel LLP.
His practice focuses on restructuring, bankruptcy,
and creditors’ rights. He holds a bachelor’s
degree, summa cum laude and Phi Beta Kappa,
from Muhlenberg College and a law degree, magna
cum laude, from Hofstra University School of Law,
where he was a recipient of the Benjamin Weintraub
and Alan N. Resnick Bankruptcy Law Award.
vendors in Sports Authority were able to
extract value by putting up a significant
fight. This will vary based on the facts,
but it is a significant precedent to note.
Secured lenders dealing with retailers
must fully understand a retailer’s
relationships with its vendors, as this
may have a material impact on its
credit/risk analysis. If a prospective
borrower sells a significant portion
of its goods on consignment, the
lender must carefully investigate UCC
filings and documentation to fully
understand the value of the collateral
it may be lending against. Moreover,
the lender must consider the potential
leverage that consignment vendors
may wield in a bankruptcy, even if
their interests are legally unprotected.
Sports Authority, a case in which the
lenders asserted that only two of the
debtors’ 170 consignment vendors
were properly perfected, demonstrates
that secured lenders may be forced
to undertake significant litigation to
enforce their rights, despite strong legal
support for their claims. This will be a
significant consideration in evaluating
a potential loan or a litigation strategy
in defending a secured position. J
Risk powers performance.
At Deloitte’s Corporate Restructuring Group, we deliver experienced
guidance and a tailored approach to help you meet your challenges.
It’s how we transform risk into opportunity.
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