transitive verb
:to make changes: do something in a new way
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Bankruptcy and Financial Restructuring

The lawyers in the Bankruptcy and Financial Restructuring practice area represent secured and unsecured creditors’ committees, boards of directors, receivers, trustees and corporate debtors in bankruptcy reorganizations and liquidations. They are also extremely active in nonbankruptcy business workouts, financial restructuring and pre-bankruptcy planning. Our experience in these areas allows the team to provide the most efficient and cost-effective service to creditor clients faced with significant decline or delayed nonpayment of unsecured or secured debt.

We also provide the same top-level assistance to publicly or privately held corporate debtor clients when faced with a crisis of mounting debt, demands from trade creditors, secured creditors or bondholders and the possibility of a forced liquidation or declaration of default under a bond obligation, and also to entities seeking to acquire assets.

Collectively, the lawyers in this practice area have appeared and practiced in virtually every federal jurisdiction in the United States and have been chosen to represent debtors, creditors and creditors’ committees in some of the nation’s largest and most complex bankruptcies and restructurings.

Our practice also encompasses enforcement work, and our lawyers have broad experience in enforcing and protecting creditors’ rights in federal and state jurisdictions across the country.

We believe clients are best served by a team concept, which employs the most efficient and cost-effective legal talent to particular situations and issues. For example, members of the team work with other practice areas ranging from real estate, tax, corporate and environmental to litigation. This ensures accurate, creative and value-driven results.

Representation of Debtors in Bankruptcy

Serving as co-counsel to Payless ShoeSource Inc. in its Chapter 11 restructuring. Payless is the largest specialty family footwear retailer in the Western Hemisphere, operating nearly 4,400 stores in more than 30 countries, with nearly 82,000 employees.

Served as co-counsel to Peabody Energy Corp. in its Chapter 11 proceedings, the second-largest Chapter 11 case filed in the country in 2016. Peabody is the world’s largest private-sector coal company.

Serving as co-counsel representing 12 related companies in the Abengoa Bioenergy U.S. Holdings Chapter 11 bankruptcies in the U.S. Bankruptcy Court for the Eastern District of Missouri.

Serving as co-counsel representing Abengoa Bioenergy Biomass of Kansas in the District of Kansas.

Served as counsel to the following debtors in bankruptcy proceedings: lendnetwork.com Corp., NHB Inc., BSW Inc., Metro Manufacturing Inc., PenUltima Inc. and Station Casinos.

Represented the debtor in the bankruptcy reorganization of a publicly traded REIT, resulting in one of the leading decisions approving third-party injunctions as part of a Chapter 11 plan.

Represented the state of Missouri in the liquidation of Dodson Insurance Co.

Representing several distressed colleges and universities, including the liquidation of Alta College and Western Education.

Represented DSI Development Specialties Inc. in the liquidation and sale of Leyton Insurance.

Representation of Creditors

Counsel to the lender/bank/note holders groups in the following sampling of cases: Thermadyne Inc., Interco Inc., Balsam/Astroturf Industries Inc. and National Benevolent Association.

Served as co-counsel to the largest creditor of Noranda Aluminum in its Chapter 11 proceedings.

Primary bankruptcy counsel for an international freight and utility processor.

Represented the lead creditor in Chapter 11 proceedings for two of the largest Fatburger franchisees in California and Nevada.

Multiple creditor representations in the following sampling of cases: Kmart; Enron; MCI/Worldcom; Global Crossing; Bridge Information Systems; Farmland Industries Inc.; Cummins Utilities; Great Northern Paper Co.; Amerco (U-Haul); Vanguard Airlines; General Motors; Mego Financial; Delphi; Capriati Construction Corp.; Chemtura; Lyondell; Blue Water Automotive; Eclipse Aviation; and PennTraffic Inc.

Representation of Creditors’ Committees

Represented creditors in the liquidation of General American Life Insurance Co.

Counsel to the Official Unsecured Creditors’ Committee in the following sampling of cases: Global Computer Enterprises Inc.; Union Financial Services Group Inc., et al.; Apex/Clark Oil Inc.; Jones Truck Lines Inc.; Wehrenberg Theaters; and Outsourcing Solutions, et al.

Practice Highlights

Some of the specific services provided to creditors, debtors and acquirers of assets in bankruptcy reorganizations, liquidations and in business workouts and financial restructurings are described below:

Reorganization and Liquidations Under the Bankruptcy Code

Timing is critical when representing a debtor, creditor or asset acquirer in a Chapter 11 reorganization or a Chapter 7 liquidation proceeding. Tactical and strategic decisions have to be made early to ensure that clients’ interests and rights are fully recognized, protected and enforced. Negotiations and litigation have to be aggressively and judiciously pursued to ensure that a debtor receives the full benefit of Chapter 11 or, conversely, that a creditor receives the maximum possible recovery on its claim in a timely manner. In this regard, our lawyers selectively use the full array of remedies and protections contained in the Bankruptcy Code and under applicable state laws and other federal statutes.

After a comprehensive evaluation of a debtor’s financial affairs, we counsel creditor clients on whether to continue an ongoing business relationship with the debtor. If the debtor may be unable to meet its obligations or reorganize its financial affairs and repay its creditors, even under the protections and extended repayment schedule provided in Chapter 11, we can advise whether to terminate the relationship. Our attorneys obtain approval of asset sales for clients whether selling or purchasing assets of or from distressed companies.

We provide debtor, creditor or asset acquirer clients with advice on how best to protect their interests and what strategy to follow to maximize their leverage and ensure they will have a guiding voice in the bankruptcy proceedings as each case evolves.

Our lawyers have vast experience in asset dispositions and acquisitions under §363 of the Bankruptcy Code and in the context of a Chapter 11 plan under other federal statutes and receivership laws. We engage in litigating motions to convert or dismiss a bankruptcy case, motions to challenge or uphold a centralized cash management system, motions for substantive consolidation of cases, motions to subordinate claims, complaints for reclamation, motions asserting setoffs of mutual debts, motions to vacate the automatic stay to allow foreclosure upon property or to obtain adequate protection of a creditor’s collateral in the form of replacement liens and/or cash payments and motions to force the debtor to cure defaults under, and perform obligations contained in leases and contracts, all of which often enable a creditor to instantly receive a significant stream of payments or to immediately recover a significant portion of the debt owed.

We are also actively and aggressively engaged in creditor defense work in connection with preferential transfers, substantive consolidation, equitable subordination, and complaints challenging fraudulent conveyances, including those involving leveraged buyouts and other adversary proceedings commenced by debtors, trustees or committees against creditor or debtor affiliates.

Team members use their vast experience in assuming and selling profitable leases or, conversely, terminating retail franchises, executory contracts and unexpired leases to maximize asset values and revenues or to effectively end an unprofitable and undesirable business relationship.

Our ability to maximize recovery for creditor clients is further enhanced by our experience in the following: negotiating treatment under a plan; asserting an election under Section 1111(b) of the Bankruptcy Code to have an entire claim treated as secured, opposing cram-downs; objecting to dischargeability of debts in Chapter 7 cases; and litigating all types of actions in adversary proceedings, including multitiered single asset real estate partnership cases.

Representing numerous corporate debtors, our lawyers assist in negotiating a restructuring of their debts; creating, obtaining Bankruptcy Court approval of and implementing reorganization plans; challenging inflated claims of creditors; terminating or reconfiguring unfavorable contracts and leases and litigating assignment of rents issues; selling substantially all of a debtors’ assets pursuant to §363 of the Bankruptcy Code and/or as part of a reorganization plan; handling labor and tax problems, including renegotiation or termination of collective bargaining agreements; and addressing potential liability under environmental laws and regulations concerning generation of hazardous waste. Debtor clients in the service and manufacturing sector have benefited greatly from our quality representation, and a majority of them have successfully reorganized their affairs and attained financial profitability.

Extensive representation of debtors, creditors and acquirers of assets gives our group a unique insight into the highly complex and technical issues that must be addressed and solved, and strategic positioning that must be employed, in bankruptcy cases.

Business Workouts, Financial Restructuring and Pre-Bankruptcy Planning

Instead of an extended confrontation in Bankruptcy Court, a carefully considered composition and extension agreement among competing creditors and a debtor, based upon a complete and accurate understanding of creditors’ and debtors’ rights under state and federal law and under the Bankruptcy Code, is often a less expensive and more beneficial alternative for all parties concerned. A nonbankruptcy business workout also facilitates creative solutions that may not be possible under the Bankruptcy Code. Accordingly, our lawyers strongly consider this alternative and, when appropriate, employ it to achieve the best results possible for clients.

The complexity and scale of business workouts and financial restructuring that we handle range from highly sophisticated stock-for-debt swaps of publicly and privately held companies, to organizing and implementing a multistate creditor repayment plan involving well over a thousand creditors, to restructuring small, closely held companies.

We also actively represent various creditors’ committees in connection with business workouts and financial restructuring of debtor companies when this alternative yields creditors a higher return and more beneficial results than a voluntary or involuntary bankruptcy proceeding.

Lawyers also assist clients by structuring contracts and financial arrangements to maximize the client’s recovery and options should other parties subsequently file for protection under the Bankruptcy Code. Pre-bankruptcy planning has also proven beneficial and cost-effective to all clients. In this regard, consideration is given to prepackaged and pre-agreed Chapter 11 plans.

Creditors’ Rights

We aggressively pursue our clients’ rights to maximum recovery of amounts owed, protect collateral, enforce property and lien rights, and minimize potential liability or loss. Outside of court, we routinely negotiate, document and close transactions and workouts designed to extract the greatest value at the least cost. In court, we litigate our clients’ interests and obtain judgments through summary judgment and trial, and routinely enforce contracts and loan documents, obtain federal and state court receiverships, obtain orders of replevin, foreclose on and sell collateral, unwind fraudulent transfers and conveyances, unwind complicated local, state and federal tax credit transactions, oppose dischargeability and collect on judgments from both debtors and third parties using post-judgment collection and execution remedies.

Representative Clients/Industries

  • Agribusiness: AgriBioTech
  • Automotive/Aviation/Transportation: Alamo Rent-A-Car, Automotive Professionals Inc., Chrysler, American Airlines, Continental Airlines, Delta Airlines, Frontier Airlines, Jones Truck Lines, National Airlines, Northwest Airlines, Sunworld Airlines, Trans World Airlines
  • Energy/Mining: Abengoa SA, Enron, Entergy, Patriot Coal Corp., Pegasus Gold, SunEdison, Veris Gold
  • Entertainment/Gaming/Hospitality: Arizona Charlie’s, Bally’s, Caesars Entertainment, Debbie Reynolds and Aladdin Hotel & Casino, Fatburger, Gold River, Hooters Hotel & Casino, Landmark, Marina, Riviera, Station Casinos, Stratosphere, Wehrenberg Theaters
  • Financial: Lehman Brothers Holdings Inc., Union Financial Services, USA Capital, U.S. Mortgage
  • Funeral Homes and Services: The Loewen Group Inc.
  • Health Care: FoxMeyer
  • Manufacturing: Jumping-Jacks Shoes Inc., National Steel, Smurfit-Stone Container Corp., Solutia Inc., Southern Building Products, Thermadyne, Wheeling-Pittsburgh Steel Co.
  • Real Estate: Lake Las Vegas, Mego Financial
  • Retail: Venture Stores, K-Mart, Merry-Go-Round Inc., Payless Cashways, Phar-Mor
  • Technology/Telecommunications: Bridge Information Systems, Digital Teleport Inc., Galaxy Cable, Global Computer Enterprises, Olympia Broadcasting, Tribune Publishing, Vegas TV, Wang

Questions? Contact one of our Bankruptcy and Financial Restructuring attorneys.

Representative Experience

A federal judge in Kansas City has dismissed a $56 million lawsuit filed against a group of directors and officers liability insurers by the trustee of the Creditors’ Trust in the reorganization plan approved in the Interstate Bakeries Corp. bankruptcy. The defendants included National Union Fire Insurance Co., an Armstrong Teasdale client. U.S. Bank, the trustee, claimed it was entitled to the funds as part of a settlement with Interstate’s former officer. National Union was represented by Tom Weaver, Deanna Wendler Modde and Susan Ehlers.