Considerations for Structuring a Board of Directors When Pre-Petition Lenders Get Equitized
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August 23, 2023
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This article from ABI Journal was first published August 1, 2023. The entire publication is available at: https://www.abi.org/abi-journal/considerations-for-structuring-a-board-of-directors-when-pre-petition-lenders-get
When pre-petition lenders or other senior creditors are equitized in a Chapter 11 process, they become owners and operators of the reorganized entity upon emergence, which may include the responsibility of forming and serving on a board of directors charged with formulating a go-forward strategy. However, newly equitized owners often have a limited time horizon for their investment, and this can complicate the decision-making around strategic initiatives. This article discusses the unique considerations for newly equitized owners when forming and serving on a board of directors of a reorganized company.
Reprinted with permission from the ABI Journal, Vol. XLII, No. 8, August 2023.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
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