ACIC Spring Investment Forum
The Four Seasons Hotel in downtown Chicago played host to the 2016 Spring Investment Forum, bringing together 196 attorneys, speakers, panelists and guests. This year, the theme was a throwback to American Bandstand – Who’s Calling the Investment Tunes in 2016? Attendees were treated to vintage hits including, Taking Care of Business (Bachman Turner Overdrive), Satisfaction (Rolling Stones), Suspicious Minds (Elvis Presley) and several other great tunes of the era as each session and its speakers were introduced. Co-chairs, Brad Crawford of Vedder Price P.C. and Kirk Orr of AIG Investments proved once again that the words investment counsel and creativity are not mutually exclusive! Kudos to them and the Education Committee who did a fantastic job of mixing the fun of the American Bandstand theme with a strong and thought-provoking program.
Further enhancing the American Bandstand theme, the Thursday afternoon reception featured a jukebox, adding even more fun to the mix. It was reported that the combination of music and mixed drinks was so powerful that some in attendance actually broke into dance. Overall, the Forum was light and fun, and attendees came home with an ACIC iTunes gift card and loads of information to read while listening to jukebox tunes.
Thursday, Day One
The morning kicked-off with a breakfast buffet and a warm welcome and announcements from the co-chairs, Brad Crawford and Kirk Orr.
Session 1: A perennial favorite, the program began with a Market Update. The discussion was led by moderator, David Pemstein of John Hancock/Manulife, and panelists, Jamie Egbert, J.P. Morgan Chase & Co., Lorri White, AIG Investments, and Jim Balcom, FTI Consulting, Inc. The session reviewed Domestic Privates, comparing 2015 with the previous year, as well as forecasting observable trends and breakdowns in the market for 2016. Part two of the session focused on the Buy-Side View, examining why insurance companies buy private placements, allocations to the asset class, balancing new deals, portfolio management and other related issues. The final segment included a look at Workouts and Trouble Spots in oil, gas and beyond.
Session 2: Bachman Turner Overdrive’s Taking Care of Business set the stage for the second session, Director/Board Observer Duties/Responsibilities. It addressed considerations in advising clients who obtain a board seat or board observation rights in connection with an investment. The panel discussed the responsibilities of fiduciary and other duties of board members, as well as minority versus control status on a board. Potential conflicts of interest, including lender/board member risks, do’s and don’t’s of board observation, when to recuse or resign and other related topics were also addressed. The session was ably moderated by Joe Kye, Vedder Price P.C., who presided over panelists Mike Barzyk and Stefanie of Allstate Insurance Company.
Session 3: After a short break, My Chi To, Debevoise & Plimpton LLP, led panelists, Sandra Horowitz, Delaware Trust Company, Joanna Anderson, Cortland Capital Market Services, LLC, Bill Kannel, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and Joel Klein, PPM America Inc., in the session Unsettled Law – Trust Indenture Act as Moving Target , which was a discussion of the Trust Indenture Act and related issues of interest to institutional investors. The Trust Indenture Act’s recent rise in ongoing litigation focused on practical implications for restructurings, intercreditor, and other issues related to instructing indenture trustees and credit facility agents. The panelists, representing perspectives of institutional investors, trustees and agents, discussed limitations on the power of majority creditors to bind holdouts, right and obligations of trustees and agents, and impact of litigation on workout activity and new debt issuances.
Session 4: After a lunch, the afternoon began with We Gotta Get Out of This Place (The Animals) and an insightful and stimulating session, International Insolvency. Panelists, Tim Graulich, Davis Polk & Wardwell LLP, Gavin Kagan, Houlihan Lokey, and Eduardo Augusto Mattar, Pinheiro Guimaraes Adbogados, astutely moderated by Cherie Schaible, AIG Investments, examined the most recent cross-border issues and cases, including foreign negotiation strategies, jurisdictional issues, and adviser selection. The panel, which included Mr. Augusto, an international restructuring expert, focused on particularly on the international insolvencies secured by foreign collateral in jurisdictions with new or untested insolvency regimes. The session ended with cogent advice concerning “Learning from Mistakes,” where panelists discussed what protective provisions should be looked for or required up front in new deals such as what can holders do when trouble starts to brew; do you have your documents and are they in English; who has standing in a foreign jurisdiction, you or the Agent/Trustee, and more.
Session 5: The next session, aptly predicated on Elvis Presly’s Suspicious Minds, Letters of Intent: Traps for the Unwary Lender, delved into the troublesome trends surrounding the area of intent versus express and implied agreement. Preliminary agreements intended to be non-binding have recently found themselves to be binding in certain instances. Moderator, Bryan Cho, Metlife, and panelists, Andy Jagoda and Matthew Parrott of Katten Muchin Rosenman LLP, and Jaya McClure, Prudential Financial, Inc., dissected the challenges by examining the most basic aspects of letters of intent, proposal letters and term sheets by defining and explaining areas such as what is a letter of intent, why use an LOI, are LOIs binding or non-binding, context matters, litigation pitfalls, and case studies. Attendees came away with an enlightened perspective.
Session 6: The last session of the day, Employee Stock Ownership Plans, was presented by moderator, Scott Adamson, Vedder Price P.C., and panelists, Kreg Jackson, Houlihan Lokey, Betsy Perdue, Holland & Knight LLP, and Stephen Smith, Amsted Industries Inc. Following an explanation of how Employee Stock Ownership Plans actually work, the discussion centered on seven topics including tax incentives for ESOP companies, legal requirements, borrower and underwriter considerations. Structuring considerations, equity structuring, and documenting loans for ESOP transactions were also discussed at length. Rounding out the session, the panel covered key ESOP-related ERISA rules and the consequences of breaching these rules.
Friday, Day Two
Session 1: On the second day of sessions members entered the room with the music I’m Too Sexy (Right Said Fred) to introduce Select Model Form Provisions. With Moderator, Armando Gamboa, Prudential Financial, Inc., and panelists, Margaret Parker-Yavuz, Morgan, Lewis & Bockius LLP, Michael Gurovitsch, Prudential Financial, Inc., and Gary Polega, Chapman and Cutler LLP, the music added much needed glamour to an otherwise unglamorous subject. The session began with a look at the more arcane provisions of Model Forms such as make-whole provisions, which included purpose and history. Panelists also provided practical examples of calculations and updates on current case law. The second half of the presentation included ERISA issues in note purchase agreements.
Session 2: Financial Covenants was the subject of the Friday’s second session. Using Dionne Warwick’s Promises, Promises as introductory music, Moderator Dan Papermaster, Morgan, Lewis & Bockius, LLP, and panelists, Sasha Kamper, Pincipal Global Investors, Matt Gabrys, The Northwestern Mutual Life Insurance Company, Patti Boss, Voya Investment Managemenc LLC, delivered an informative session that explored specified financial covenants in greater detail, including traps for the unwary document drafter or reviewer. These included discussion on public versus private markets and a summation of covenants and trends over the past 10 years; and Bank Parity issues, including subsidiary guarantor protections and case studies illustrating why these kinds of covenants are the most important in the entire covenant package.
Session 4: Traditionally the last item on the schedule, the two-hour ethics session was one of the most unique and entertaining presentations of the Spring Forum. The first panel centered on social media and its increasing relevance in driving business, and the second panel focused on the role and duties of pre-designated counsel. Using the popular game, Jeopardy, as a presentation format, Ethics – Re-visiting Social Media and Pre-designated Counsel, was presented by Moderator, Allison Rhodes, Holland & Knight LLP, and panelists, Carl Richardson, university student, John Reed, Rain BDM, and Chip Fisher, Morgan Lewis & Bokius LLP. University student, Carl Richardson, playing the part of Alex Tribec, parlayed questions from categories such as Social Media, Brand Camp, Engagement Party, Bite Your Tongue, and Learn Our ABCs into informative and educational answers from the panel. The audience participation made for a lively and interactive learning experience for everyone.
The ACIC Spring Investment Forum concluded on Friday afternoon with a few closing remarks thanking the Co-Chairs and Vice President for organizing the event. After two days of tributes to American Bandstand and using the joy of music to enhance the presentations, participants left for home enlightened with the tools and tunes to tap into the future.