The various aspects of a creditors' rights practice present a unique mixture of business, financial, legal, and human relations problems. Robinson+Cole has worked extensively with a broad spectrum of leading lending institutions, companies, and investors in need of specialized debtor/creditor relations counsel on a wide variety of sophisticated transactional and litigation matters. Our group has extensive experience pursuing claims-whether arising from a default of normal contractual payment obligations, declining collateral value, or other external factors.
We routinely work with our clients to evaluate current creditworthiness and to counsel them on their rights and remedies under contract documents and applicable law. Likewise, the firm's ability to identify weaknesses in contract documents, servicing history, or collateral positions, in tandem with counseling clients regarding these issues, facilitates the appropriate decisions in an effective and timely fashion and may enhance a client's ability to correct or adjust these issues early in a collection process.
To understand the full extent of a client's rights and remedies in the event of a default, the group's lawyers work with the client in undertaking a detailed analysis of the contract documentation. This review process includes an analysis of original contract, loan, and mortgage documentation, including original due diligence materials, amendments, modifications, waivers, and consents; a review of current financial statements and other reporting documentation; and an analysis of changes in participants, agents, and co-lenders.
It is important to identify and confirm the provisions dealing with defaults and remedies. Our creditors' rights lawyers also analyze the nature and extent of collateral, securing the underlying obligation and the client's rights regarding the collateral.
OUT-OF-COURT RESTRUCTURING AND WORKOUTS
After completing the preliminary analysis, our creditors' rights lawyers have extensive experience negotiating consensual modifications or settlements prior to or shortly after commencing state law enforcement actions. Successfully negotiating with a debtor in this environment is dependent on identifying a clear exit strategy and setting realistic goals to effectuate the strategy.
Consensual arrangements are not always possible. Our group has a wide variety of foreclosure experience in state courts. We have experience in large commercial and industrial foreclosures and volume commercial multifamily housing foreclosures. Typically, the firm handles the prime or lead lender, but we also have significant experience representing secondary lenders on large projects. Our litigation lawyers, who handle these matters, work with our bankruptcy and workout professionals, as these disciplines often intersect at some point during the process.
Robinson+Cole represents various creditor constituencies, including secured and unsecured creditors, critical vendors, equity security holders, and trustees in all aspects of commercial bankruptcy cases. Our experience encompasses analyzing and challenging first-day filings, including cash collateral and DIP financing issues, retention and bonus motions, critical vendor payments, and proposed asset sales through Section 363 of the Bankruptcy Code. The group also has extensive experience in the development and negotiation of consensual and contested plans of reorganization and liquidation, including out-of-court and prepackaged plans.
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 experience includes guaranty enforcement actions, preliminary injunctions, lender liability litigation, bankruptcy preference and fraudulent transfer proceedings, claim and cure objections, subordination actions, and other avoidance claims. We also have provided representation on matters arising from loan participations, intercreditor agreements, lender conduct, executory contracts, license and franchise agreements, distributorship agreements, and commitment letters.
PRE AND POSTJUDGMENT COLLECTION STRATEGIES
Establishing liability is only phase one of the overall effort. Preserving collection remedies against a guarantor or others personally liable through such mechanisms as prejudgment remedies of attachment and garnishment are just as important as postjudgment efforts, including discovery of assets and debtor examinations. The firm is well versed in advising clients on strategic initiatives at the front end to preserve and potentially freeze assets for collection availability after judgment.
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 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.