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These creditors come together to pursue their rights.  One of these rights is the right to hire outside counsel, a lawyer and a financial advisor.  Working together, these professional develop a means of achieving the highest possible recovery for the creditors.  That may be the highest possible return on the receivable that existed before the company filed for bankruptcy or it could mean ensuring that the debtor puts in place a plan of reorganization that would enable the company to continue as a good customer of its suppliers.  As I said before, creditors have rights; they get together and pursue these rights through the following sources of recovery.  One is to be designated, as I mentioned before, a critical vendor; the court often grants the debtor authorization to negotiate a payment with key suppliers and ideally in the case of the bankruptcy you as a supplier would like to be designated in the category of critical vendors.  Another way of receiving a recovery is in which the confirmation of plan of reorganization occurs for the settlement fund for the unsecured creditors typically some amounts of cents for every dollar outstanding.

28. Another way that the estate can get a recovery is through an asset sale, the hope being that the sales proceeds exceed the level of secured debt so that there will be cash left over to be divided among the creditors.  The third source of recovery is liquidation; generally this carries a very low recovery and often provides nothing for the creditors.  It is also possible to negotiate a settlement fund based on leverage obtained by the committee through the work of its advisors.  An example that may be is if there was a transaction that occurred in the recent past that may have rendered the company technically insolvent and therefore placed the creditor’s interest in jeopardy.

29. Another form of recovery is through a debt for equity conversion in which the company continues and some provisions are made for creditors to be paid off.

30. As I indicated above, there are numerous issues that are both pure business and also related to culture that affect the satisfaction of a foreign supplier by a U.S. company.  We hope that we have demonstrated that it is not necessary for the supplier to be passive or unquestioning throughout the relationship.  It is critical for all companies supplying goods and services to get paid when they do so.  The foreign creditor that takes steps in advance to enhance the likelihood that this will always happen; a) sleeps better at night; and b) earns the respect of its U.S. customer, who is after all a form of business partner.  U.S. companies like to know that their suppliers are sound business people and if your company takes some of the steps that we outlined above, you will be acting as a sound business practitioner.  Many of the foreign companies have experienced the benefits of finding a financial advisor to assist them in obtaining insights mentioned above.  In addition, there are international business advisors who are familiar with the culture and business norms in both the U.S. and China.  Having the right advisors can be critical to your decision making process, recovery and continuing business relationships with these customers.  We recognize that we have presented a broad overview of all of the steps mentioned above.  Some of you may have questions about or deeper interest in one or more of the specific steps that we mentioned above.   I would be happy to answer any questions or have a longer discussion with any interested parties.  If I receive enough inquires we may plan another video session on one or more of the above topics.

Thank you very much for your consideration and best wishes to you all.

 

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