Creditor Advisory

Outside perspective helps develop better strategy.

When a creditor is caught up in a bankruptcy filing, it can be difficult to find the independent perspective and expert insight needed for resolution. Having acted as financial advisor to numerous official committees of unsecured creditors, as well as other creditors in bankruptcy situations, ESBA professionals have the experience and skills to assess the debtor’s situation, challenge strategies and projections, offer alternatives and provide actionable advice.

Through it all we are focused on each client’s goals, whether achieving the maximum possible financial recovery on their pre-petition claims or ensuring that it is feasible for the debtor to reorganize and move forward as a good customer capable of meeting its financial obligations.

In all of our creditor committee assignments, we work closely with outside counsel and the members of the committee to ensure that, as the eyes and ears of the creditors, we are providing the appropriate mix of services in a timely, cost-effective manner.

In representing creditors, we assess:

  • The condition of the Debtor's operations
    • Ongoing viability of the business
    • Ability to stop operating losses
  • The Debtor's intended restructuring path(s)
    • If it is the development and confirmation of a plan of reorganization (POR), we advise on:
      • The feasibility, taking into consideration the timeframe required/available, infrastructure needs (e.g., systems) and management capabilities
      • Consistency with the best interests of the unsecured creditors
      • Advisability of the Debtor’s considering a Section 363 asset sale
    • If the Debtor determines that a Section 363 asset sale is the appropriate restructuring path, we offer advice regarding:
      • Consistency of a sale with the best interests of the unsecured creditors versus a plan of reorganization enabling the Debtor to reorganize and continue operations as a good customer under the same ownership
      • Existence of an initial bidder (Stalking Horse) in place
      • Any previous ties between the Stalking Horse and the Debtor
      • If the sale process has not progressed to the point of having a Stalking Horse in place, the likelihood that it will be successfully concluded at a price that provides a recovery for the unsecured creditors
      • Estimated valuation of the assets
      • Adequacy of the time provided in the proposed sale procedures
  • Relative attractiveness of a liquidation

Regardless of the restructuring path being pursued, we evaluate and investigate additional areas to enhance the recovery to unsecured creditors including potential preference actions; equitable subordination actions; fraudulent conveyances; other avoidance actions; management malfeasance; and redundant assets that could be sold.

Related Transactions

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