How To Maximize Value Of A Failing Debtor’s Assets—From A Secured Creditor’s Perspective

I’m in a discussion, recently, about this question:

What are the best ways to maximize value of the assets of a failing business, from the perspective of a debtor’s primary secured creditor?

The short answer is this:

the best ways—by far—are debtor initiated processes; and

the worst ways—by far—are creditor initiated processes.

I’ll try to explain, based on decades of experience.

Debtor Initiated

What follows is a summary of debtor initiated liquidation efforts — from best to worst (all of which are better than all creditor initiated efforts).

–Voluntary Liquidation

Many times, over the years, I’ve approached secured creditor’s counsel with a debtor’s voluntary liquidation proposal designed to maximize the value of debtor’s assets. The proposal includes an auction process — often