Bankruptcy & Creditors Rights Co-Chair Randy Klein has provided commentary for Turnarounds & Workouts' "Another Busy Year" feature article, which asks seven restructuring attorneys for their insights on the upcoming year.
Following are Randy's comments included in the article.
Describe the opportunities, if any, for distressed debt investing: Someone is going to figure out a way to take on busted downtown office real estate off the books of the regional and national banks. There probably hasn’t been an “opportunity” like that since the RTC days. However, it is more challenging now to figure out when/how those properties will start to cash flow, so it will take a long-term investor (maybe large family offices) to want to hold those properties for the long term.
What do you consider as your greatest challenge going into 2024? Trying to budget what a middle market Chapter 11 should cost. For lending clients, Chapter 11 has gotten substantially more expensive over the years, based primarily on increased billing rates but also the practice has gotten much more intensive. It is difficult to run a “quick” Chapter 11 for a reasonable, controlled cost structure. Creditors’ committees (for unsecured creditors that are completely out of money) continue to be an external drain on efficiency that rarely benefits anyone other than the committee professionals.
Randy also provided commentary for Turnarounds & Workouts' "The Year in Review" article published December 2023.