Knowing When to Walk Away
I don't know if it is coincidence, but since moving to Kentucky in 2007, I have worked on cases involving much more interesting collateral than earlier in my career. In fact, I'm only one collateral-category away from hitting the Kentucky Trifecta of Equine/Coal/Bourbon workouts (sadly, I'm missing the most important one).
I recently polled the lawyers in our creditors' rights and bankruptcy group to work up a list of the most interesting or unique collateral they have dealt with. As always, the Top 5 is in no particular order:
1. Rare, Live Birds!
My partner Lou Allen nominated a "store inventory of rare, living birds." Any time your collateral needs to eat, it imposes special praticial considerations that they do not teach you about in law school. No word if Toucan Sam was involved in this case.
2. Stallion Seasons!
My partner Rick Vance nominated Stallion Seasons, which are, according to our friends at Keeneland, the "The right to breed one mare to a particular stallion during one breeding season." #equinederivatives!
3. "Party" Bus!
My colleague Rob Meyer reposessed and sold a "party" bus years back ago that served, essentially, as an ....ahem... mobile, tawdry dance facility.
4. Ice Cream!
I represented a major constituent in the Dippin' Dots bankruptcy a few years back. This is the first time I ever ate my client's delicious, delicious collateral. Until that bourbon case comes along, I cannot imagine topping this one. Also, as you might expect, the professionals in the case would make jokes about avoiding a "meltdown" at every turn.
Coal bankruptcies are an institution around these parts. As my partner Liz Thompson likes to say, when the market is way down, coal companies are motiviated to file because they lack cash flow. When the market is way up, companies are motivated to file reject under-market supply contracts. A coal workout deal was also my first exposure to slightly unusual collateral, and I presently have a hunk of coal sitting in my office as a souvenir.
Drop me a line if have worked with some other unusual/interesting collateral!