Welcome Back
Technical Co-Chairs
Maurice Moses
Ernst & Young LLP
Dr. Lars Westpfahl
Freshfields Bruckhaus Deringer LLP
General Sponsors
AlixPartners LLP
Asset Reconstruction Company (India) Ltd
BTG Mesirow Financial Consulting
Deloitte LLP
Derra, Meyer & Partner
Financial Times
Greenberg Traurig LLP
hww wienberg wilhelm
PricewaterhouseCoopers
Group of Thirty-Six
AlixPartners LLP
Allen & Overy LLP
Alvarez & Marsal LLC
Baker Tilly
Begbies Global Network
Bingham McCutchen LLP
Cadwalader Wickersham & Taft LLP
Chadbourne & Parke LLP
Cleary Gottlieb Steen & Hamilton LLP
Davis Polk & Wardwell
De Brauw Blackstone Westbroek
Deloitte LLP
Ernst & Young
Ferrier Hodgson
Freshfields Bruckhaus Deringer
Goodmans LLP
Grant Thornton
Greenberg Traurig LLP
Huron Consulting Group LLC
Jones Day
Kaye Scholer LLP
Kirkland & Ellis LLP
KPMG LLP
Linklaters LLP
Lovells LLP
Norton Rose LLP
Pepper Hamilton LLP
PPB
PricewaterhouseCoopers
RSM Corporate Advisory Services
Shearman & Sterling LLP
Skadden, Arps, Slate, Meagher & Flom LLP
Vantis
Weil, Gotshal & Manges LLP
White & Case LLP
Zolfo Cooper LLP
Plenary Sessions
• Cross-border co-operation:
Current trends
• Storms of the recent past and
managing future challenges
Joharah Ballroom
Breakouts 10.00 – 11.15am
• A1 Over regulated or laissez-faire?:
Role of the regulators
Joharah Ballroom
• B1 Operational restructuring in the
MENA region
Joharah Ballroom 56
• C1 Effect of the credit crunch on
personal insolvency
Joharah Ballroom 7
Breakouts 11.45 – 1.00pm
• A2 Valuation of distressed entities,
assessing where value breaks and the
role of DIP funding: A case study
Joharah Ballroom
• B2 Corporate failure – Poor governance
or flawed business plans?
Joharah Ballroom 56
• C2 Practice management in a recession –
How have we coped?
Joharah Ballroom 7
Breakouts 2.15 – 3.30pm
• A3 Real estate in distress: Bankruptcy
and restructuring cases
Joharah Ballroom
• B3 Ponzi schemes: A recent discovery?
Joharah Ballroom 56
• C3 Surgeon or undertaker? Dealing with
turnaround and burial issues in a credit
crunch
Joharah Ballroom 7
Cross-border co-operation:
Current trends
Cross-border co-operation:
Current trends
Chair: Honorable Arthur J. Gonzalez,
Chief Judge of the United States Bankruptcy
Court, Southern District of New York
The Hon. Mr. Justice Sanjay Kaul,
Delhi High Court
Stephen Baister, Chief Bankruptcy Registrar,
High Court of Justice
Senior Deputy Judge Jeanette Melchior, Maritime
and Commercial Court, Copenhagen, Bankruptcy
Division
Breakouts 10.00 – 11.15am
• A1 Over regulated or laissez-faire?:
Role of the regulators
Joharah Ballroom
• B1 Operational restructuring in the
MENA region
Joharah Ballroom 56
• C1 Effect of the credit crunch on
personal insolvency
Joharah Ballroom 7
Over regulated or laissez-faire?:
Role of the regulators
Chair: Carlos Mack, White & Case LLP
Johnson Kong, BDO Limited
Luis Manuel C. Méjan Carrer, Immediate
Past Chairman of the International
Association of Insolvency Regulators
Kathrine Meloni, Slaughter and May
“Over regulated or laissez faire: How
much regulation do the financial
markets need?“
Dr. Carlos Mack, White & Case
“If you want good security, hire a thief”
(Financial recruiter, explaining why disgraced bankers are being
offered new jobs, in “The Power of Yes”)
This presentation is mainly based on the play
“The Power of Yes”
by
David Hare,
currently showing at the National Theatre, London, as well as on
extensive reading of academic, press, legal, accountancy,
economic, ethical, etc publications.
The moral of the story
Alan Greenspan before the crisis: “Markets are
imperfect but they bring such benefits that you just have
to live with the fact that from time to time they collapse,
so you just pick up the bits. The benefits of the market
are so great that you have to live with the price.”
“Yes, but Alan, the people who end up paying the price
are never the people who get the benefits.”
(By the way, in the meantime even Alan Greenspan has revised
his view: “What I said in June (before the crisis) no longer
applies.” and: “The whole intellectual edifice (e g markets are
decent and wise) has collapsed.”)
Do you recall the good old times of
plain vanilla capitalism…
“Capitalism without Bankruptcy is
like Christianity without Hell”
How many banks and/or insurance
companies have you seen going
bust?
The Financial Alchimist Formula: BlackScholes Model
• Myron Scholes (Nobel Prize in Economics, run LTCM
(Long Term Capital Management) and fellow academic
Fisher Black algebraic formula to calculate risk by
calculating the right price of a future option
• LTCM posted profits of more than 40 percent; ration of
borrowing to capital (leverage) at 50 to 1
• Believed to have eliminated risk by a mathematical
model: Risk free gambling
• The B-S Model is still used to this day as the
internationally recognised formula to calculated risk
• Caveat emptor: „When you model risk, you only model
your own risk. You don‘t model for the whole system.
That‘s the problem with mathematical modelling.“
The Financial Crisis in a nutshell:
“SLUMP”
“SLUMP”
Sub-Prime
Sub-Prime
• Never occurred to banks that the
housing market would stop growing or
even collapse
• Uncontrolled lending of money to ninjas
(no income, no job, no assets)
• Over 1,000,000 mortgage dealers in US
• Cutting and Repacking
The Financial Crisis in a nutshell:
“SLUMP”
“SLUMP”
Sub-Prime
Liquidity
Liquidity
• Liquidity circulation stopped on August 9th 2007
• Banks didn‘t have a clue what sort of exotic-toxic stuff
they had in their books
• All banks looking at each other and guessing who is
holding the bad stuff
• System freezes: No one can/will borrow, no one
can/will lend.
• Queen‘s Question at LSE: „Why did nobody see it
coming?“ E g in the UK the FSA thought Bank of
England was responsible, Bank of England thought it
is for the FSA to look into the matter…
The Financial Crisis in a nutshell:
“SLUMP”
“SLUMP”
Sub-Prime
Liquidity
Unravelling
Unravelling
• Within Wall Street Lehman Brothers (not Sisters) was
one of the big players pooling bad (sub-prime)
assets, packaging them in mysterious structures and
selling them across the planet.
• Investors (banks and private) around the world were
full of this sub-prime crap.
• Once the investment began to fall it did not by a few
per cent; quite on the contrary by 50 per cent, 70 per
cent and more.
• Lehman should/could have been quietly managed out
of business. However, the Fed drew the wrong line:
the largest corporate failure in history was like a
supernova exploding, leading to meltdown…
The Financial Crisis in a nutshell:
“SLUMP”
“SLUMP”
Sub-Prime
Liquidity
Unravelling
Meltdown
Meltdown
• “Too big to fail!”
• Wall Street got its own new kind of socialism: Socialism
for the rich. Privatize earnings and socialize losses. Here
is where the sense of injustice begins to kick in!
• What‘s the purpose of Government? Everyone will agree
on the common formula: To provide the public good.
Defence, education, health and a well functioning financial
system.
• The government’s job is not only to regulate. Its job is to
provide a sound, reliable, decent financial system.
• Reality? Banking system has been off God knows where,
doing God knows what!
• Size of damage? 6 trillion USD:
6,000,000,000,000,000,000,000,000…
The Financial Crisis in a nutshell:
“SLUMP”
“SLUMP”
Sub-Prime
Liquidity
Unravelling
Meltdown
Pumping
Pumping
• Helicopter money distribution started: Governments
around the world throwing money out onto corpses:
Fannies & Freddies and AIG and Northern Rock and
Hypo Real Estate, and Fortis and Kaupthing, and
Landsbanki and not to forget HBOS and the Royal
Bank of Scotland
• Pumping tax payers money to pay out bonuses to
bankers of de facto bankrupt banks
• and no end in sight…
Who is to blame? Pick your own
choice
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Ninjas excessive borrowing
The „Originate-to-Distribute“ Model
The Black-Scholes Risk Model
International Accounting Standards
Fred Goodwin and Dick Fuld, i e Bankers (managers and
supervisory board members) greed, lack of responsability and
no fear/prudence
Bill Clinton, Barack Obama, Tony Blair and Gordon Brown
Hack Paulson (US Treasury Secretary and Banker)
Alan Greenspan, Mervyn King and Jean-Claude Trichet
Rating agencies (AAA)
Investors (private & institutional)
Accountants
Lawyers
OR JUST ANOTHER NORMAL BUSINESS CYCLE OF
GROWTH & DECLINE?
What‘s the remedy? Regulation,
stronger Governance rules…
• Liberal Anglo-American approach (still) believing in
the self-regulating market forces against the
Continental-European socio-capitalism with its firm
conviction that capitalism needs regulation
• What sort of Regulation:
– Light Touch Regulation? (either you regulate or
you don‘t)
– Watchdogs or bloodhounds?
What‘s the remedy? Regulation,
stronger Governance rules…
• Stronger Governance rules
• Specific rules for the banking industry:
– Early warning system
– Cross border crisis management
… and the answer?
“Right now it’s too late for an analysis and to early
for a forecast…”
Over regulated or laissez-faire?:
Role of the regulators
Chair: Carlos Mack, White & Case LLP
Johnson Kong, BDO Limited
Luis Méjan, Immediate Past Chairman of
the International Association of Insolvency
Regulators
Kathrine Meloni, Slaughter and May
Breakouts 11.45 – 1.00pm
• A2 Valuation of distressed entities,
assessing where value breaks and the
role of DIP funding: A case study
Joharah Ballroom
• B2 Corporate failure – Poor governance
or flawed business plans?
Joharah Ballroom 56
• C2 Practice management in a
recession – How have we coped?
Joharah Ballroom 7
Valuation of distressed
entities, assessing where
value breaks and the role of
DIP funding: A case study
Valuation of distressed entities,
assessing where value breaks and
the role of DIP funding: A case study
Chair: Robin Spencer, Lovells LLP
Neil McCauley, The Commercial Bank of
Qatar (Q.S.C)
Dr. Frank Nikolaus, Nikolaus & Co. LLP
Keith J. Shapiro, Greenberg Traurig LLP
MillbyMicron Group Structure Chart
PE Investors
Current Indebtedness to Finance Parties
MillbyMicron
(Holdings) Ltd
£37.5m
MillbyMicron
Ltd (UK)
England
£37.5m
MillbyMicron
Inc (US)
United States
£37.5m
£100m (Senior)
£50m (Mezzanine)
MillbyMicron
GmbH (DE)
Germany
£37.5m
MillbyMicron
(Dubai) Ltd
(DU)
Dubai
Valuation of distressed entities,
assessing where value breaks and
the role of DIP funding: A case study
Chair: Robin Spencer, Lovells LLP
Neil McCauley, The Commercial Bank of
Qatar (Q.S.C)
Dr. Frank Nikolaus, Nikolaus & Co. LLP
Keith J. Shapiro, Greenberg Traurig LLP
Breakouts 2.15 – 3.30pm
• A3 Real estate in distress: Bankruptcy
and restructuring cases
Joharah Ballroom
• B3 Ponzi schemes: A recent discovery?
Joharah Ballroom 56
• C3 Surgeon or undertaker?
Dealing with turnaround and burial
issues in a credit crunch
Joharah Ballroom 7