Bankruptcy and Creditors' Rights

Overview

Robinson+Cole’s bankruptcy and creditors' rights practice involves a unique mixture of litigation, business, and finance experience. We work extensively with a broad spectrum of leading lending institutions, companies, and investors in need of specialized debtor/creditor relations counsel on a multitude of sophisticated transactional and litigation matters. Our lawyers have a keen understanding of how to pursue claims, whether arising from a default of normal contractual payment obligations, declining collateral value, or other external factors.

Our Services and Our Team

Our creditors’ rights team assists clients throughout the lifecycle of a credit relationship. We routinely counsel our clients concerning the creditworthiness of transaction counterparties and specialized transaction risks associated with unique collateral or collection issues. Our out-of-court restructuring experience help clients obtain recoveries without the risk, delay, and expense attendant to litigation. Our ability to identify weaknesses in transaction documents, servicing history, or collateral positions promotes an informed decision-making process to avoid unanticipated consequences of collection activity and enhances our clients’ ability to correct or adjust issues early in a collection process. If formal collection actions are required, we leverage our experience of foreclosure, secured party sales, litigation, bankruptcy, and receivership to maximize creditors’ recoveries.

Preliminary Analysis

To understand the full extent of rights and remedies in the event of a default, our team collaborates with clients to analyze the details of applicable credit documents such as the following:

  • original contract, loan, and mortgage documentation, including original due diligence materials, amendments, modifications, waivers, and consents
  • current financial statements and other reporting documentation
  • changes in participants, agents, and co-lenders

Our creditors' rights lawyers also analyze the nature and extent of any collateral securing the underlying obligation and the client's rights with respect to the collateral.

Out-of-Court Restructuring and Workouts

If possible, our creditors' rights lawyers negotiate consensual modifications or settlements prior to or shortly after pursuing our clients’ collection remedies. Successfully negotiating with a debtor in this environment depends on identifying a clear exit strategy and setting realistic goals to implement the strategy.

Foreclosure

Because consensual arrangements are not always possible, the next step may be foreclosure. We have considerable judicial and nonjudicial foreclosure experience and are knowledgeable in large commercial and industrial foreclosures as well as volume commercial multifamily housing foreclosures. The lawyers who handle these matters understand the common intersection of foreclosure and bankruptcy and are prepared to pursue our client’s interests in state and federal insolvency proceedings.

Bankruptcy and Receivership

Our lawyers have represented virtually all constituencies having a stake in bankruptcy and state receivership cases, including the following:

  • secured and unsecured creditors
  • critical vendors
  • landlords
  • creditors’ committees
  • equity security holders
  • trustees and receivers
  • debtor-in-possession (DIP) lenders

We regularly litigate these issues arising in bankruptcy and state insolvency proceedings:

  • relief from stay
  • cash collateral and DIP financing issues
  • retention and bonus motions
  • critical vendor payments
  • proposed asset sales
  • administrative and other priority claim issues
  • lease assumption and rejection
  • dismissal and conversion of bankruptcy proceedings

In addition, we can develop and negotiate consensual and contested plans of reorganization and liquidation, including out-of-court and prepackaged plans.

Debtor/Creditor Litigation

Because the restructuring and liquidation process can be contentious, with diverse constituencies competing for limited assets, clients benefit from our substantial litigation experience in state and federal court, including bankruptcy proceedings. Our representation includes these areas:

  • guaranty enforcement actions
  • preliminary injunctions
  • lender liability litigation
  • preference and fraudulent transfer litigation
  • claim and cure objections
  • subordination actions

Creative Collection Strategies

Maximizing creditor recovery is as much about securing assets to pay our clients’ claims as establishing that money is due. Our lawyers develop effective and creative strategies to collect from guarantors or others that are potentially liable to our clients. Mechanisms such as prejudgment remedies of attachment and garnishment, injunctive relief to freeze assets,  asset discovery, and debtor examinations are all part of our strategy to see that our client’s claims are not rendered uncollectable through the dissipation of assets.

    • Experience
      • Represented the largest creditor of celebrity rap mogul and entertainer in his Chapter 11 case, successfully resolving disputes regarding the claim, which arose from a joint venture gone bad, and achieving a substantial recovery. Success in the case came from the successful collaboration of the largest creditors, effectively operating as an informal committee, and identification of a viable exit strategy with the debtor after the creditors filed their own plan.

      • Retained by one of the world's largest manufacturers to represent one of its business units in all bankruptcy and commercial collection litigation matters throughout the U.S., including over 100 bankruptcy cases, some of which are among the largest and most complex cases pending in the country. Provided advice on collateralizing debt obligations and on enforcing alternative creditor remedies, including advice on reclamation and mechanic's liens.

      • Represented financiers, who provided venture capital to a marketing company, in successfully moving to convert the marketing company’s bankruptcy case from a Chapter 11 reorganization to a Chapter 7 liquidation and in foreclosing on collateral, including the debtor's intellectual property. Representation included extensive discovery and briefing, culminating in a successful trial in the Bankruptcy Court in the Southern District of New York.

      • Represented Fortune 500 company as major investor in and lender to professional sports league. Implemented debtor in possession financing to facilitate orderly liquidation. Negotiated consensual plan that preserved tax benefits for estate and maximized likely return to creditors, dependent upon outcome of antitrust litigation.

      • Represented foreign liquidator of overseas banks in litigation to recover more than $140 million in U.S. assets seized by the New York superintendent of banks. To recover the seized funds for distribution in liquidation proceedings in Belgrade, we filed an ancillary proceeding under the United States Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. The litigation included successful appeals to the District Court and the United States Court of Appeals for the Second Circuit. Following remand, the litigation settled on advantageous terms. We defeated subsequent collateral attacks on the settlement in New York State Supreme Court and the Appellate Division.

      • Represented creditors in some of the largest bankruptcy cases throughout the United States, including Lehman Brothers, Chrysler, Lyondell Chemical, Enron, WorldCom, Adelphia, Toys “R” Us, RadioShack, Rue21, Answers Holdings, and US Airways I and II.

      • Represented numerous secured and unsecured creditors in contested relief from stay, cash collateral and confirmation proceedings.

      • On behalf of a secured creditor, successfully negotiated proposed plan or reorganization in cooperation with Chapter 11 debtor which provided full recovery of the client’s multimillion dollar claim, including interest and fees, plus an equity stake in the post-confirmation student housing business.

      • While representing international equipment financier, obtained relief from stay to repossess and disposed of tower cranes through secured party sales to overseas purchasers, and recovered associated crane rental proceeds through state court receivership.

      • Obtained full recovery, including fees and interest, for lender whose collateral proceeds had been fraudulently transferred by borrower into a real estate holding company. Obtained prejudgment attachment and injunctive relief against holding company to prevent further development until the client’s claim was satisfied.

      • Represented institutional lender in a multifaceted workout with affiliated borrowers involving several real estate assets and equipment, culminating in a heavily negotiated forbearance agreement, pursuant to which our client received full repayment of the indebtedness.

      • On behalf of a winning bidder for a multimillion dollar piece of commercial real estate, successfully argued for disqualification of competing bid for failure to comply with the Bankruptcy Court’s sale procedures order.

      • Counsel to Official Committee of Unsecured Creditors in Sigg Switzerland (USA), Inc. (District of Connecticut).

      • Counsel to Official Committee of Unsecured Creditors in Label Systems, Inc. (District of Connecticut).

      • Counsel to Official Committee of Unsecured Creditors of Alliance Security, Inc. (District of Rhode Island).

      • Co-counsel to Official Committee of Unsecured Creditors of UTGR, Inc. d/b/a Twin River (District of Rhode Island).

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    • News
      • July 27, 2018

        Patrick Birney Named Chair of United States Law Firm Group Bankruptcy and Creditors Rights Committee

        • » more info
      • June 29, 2018

        Steve Boyajian Authors Article on Pre-Petition Tax Sales in Bankruptcy

        • » more info
        • View article

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