4A — January 12 - 25, 2018 — Financial Digest — M id A tlantic

Real Estate Journal


F inancial D igest By Rachel Greenleaf and Kristen Burgers, Hirschler Fleischer The New “Rs” of Bankruptcy: Retail, Restructuring and… Richmond? I n the evolving world of e-commerce, it’s not sur- prising that many promi-

flexibility that they need to get to a successful result. As one example, upon the presenta- tion of appropriate evidence, the court has approved con- troversial third-party releases and plan injunctions. The Richmond courts also provide debtors with signifi- cant breathing room. In the Circuit City bankruptcy case, for example, the court issued a seminal decision interpreting provisions of the Bankruptcy Code to provide for the pay- ment of post-bankruptcy rent on the effective date of a plan of reorganization – not sooner. This frees up substantial li- quidity during the pendency of a Chapter 11 case (funds that can be used for ongoing operating needs) and for a large retailer, it provides suf- ficient time to determine the viability of a location and/or to re-negotiate a longer term- arrangement with a landlord – a significant advantage that might not be available in other jurisdictions. The retail shake-up is not over yet. If the trend contin- ues, look for the next major retailer to file bankruptcy in Richmond. Rachel A. Greenleaf and Kristen E. Burgers are at- torneys in the Bankruptcy, Restructuring and Credi- tors’ Rights practice at Hirschler Fleischer (Rich- mond, VA). n RED names Brooks to lead the growth & product diversification strategies COLUMBUS , OH — Trent Brooks has been named president of RED Mortgage Capital, LLC , the Mortgage banking arm of comprehensive capital pro- vider RED Capital Group LLC . Brooks joined RED on De- cember 11th as president of RED Mortgage Capital, LLC and national head of pro- duction. With more than 30 years of executive leadership experience in the Multifam- ily housing industry, he has long-term relationships with Fannie Mae, Freddie Mac and FHA in his support of Afford- able, Workforce, Convention- al, Green and Small Balance Housing finance programs. n

retail bankruptcy filings of all time were filed in Richmond: Toys “R” Us, Circuit City and Heilig-Mey- ers. You ma y

that may be one possible ex- planation, there is another: The Richmond bankruptcy court’s practicality and astute understanding of Chapter 11 practice. Time is money, especially in bankruptcy. As a practi- cal matter, the longer a case lingers in bankruptcy, the higher the professional fees and the lower the chances of a successful reorganization. In Richmond, large bankruptcy cases typically move along at the pace requested by the par- ties, including any expedited hearings that may be neces-

sary. As an example, in Toys “R” Us, the court approved a nearly $3 billion debtor in possession financing facility on less than 24 hours’ notice. Not only does Richmond of- fer the ability to move a case quickly, but it also offers all constituents a level of certain- ty not necessarily available in other jurisdictions. Based on a wealth of case law and deci- sional history, the Richmond bankruptcy court operates on one basic premise: If the parties operate within the con- fines of the Bankruptcy Code, the court will allow them the

nent retail- e r s h a v e t u r n e d t o out-of-court workouts and bankruptcy t o r ema i n afloat. What may come as a surpr i se ,

b e a s k i n g y o u r s e l f , “Why Rich- mond?” Some h a v e s u g - gested that the trend is

Rachel Greenleaf Kristen Burgers

however, is where retailers are choosing to file: Richmond, Virginia. Though many may have assumed Delaware or New York, three of the largest

based largely on a perception that its bankruptcy court is more willing to approve hefty professional fees than other jurisdictions. While

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