Bankruptcy and Financial Restructuring Group: 2012 Recap

Bankruptcy and Financial Restructuring Group: 2012 Recap

Publications

A Productive Year Across Bankruptcy Litigation and Restructuring Practices

WilmerHale’s Bankruptcy and Financial Restructuring Group is pleased to report another successful year. Led by nine partners out of the firm’s New York, Boston, and Washington DC offices, the group presents a unique combination of litigation and transactional practices spanning the bankruptcy and financial restructuring landscape. In New York, the group is composed of Phil Anker, Andy GoldmanBill Perlstein and George Shuster. In Boston, the group’s partners are Mitch Appelbaum, Dennis Jenkins and John Sigel. Craig Goldblatt works primarily from the firm’s Washington DC office. Together, the group’s partners work across the spectrum of bankruptcy-related litigation, financial restructuring, bankruptcy policy, and debt-related transactional matters. In this recap, we share with you a summary of some of our practice highlights from 2012 in each of the areas in which we focus. These matters demonstrate the group’s involvement in some of the most prominent bankruptcy cases this year. They also demonstrate how WilmerHale’s firmwide skills in areas such as financial industry regulation, intellectual property, and complex civil litigation and appeals integrate with the group’s bankruptcy expertise to create an unparalleled ability to service the bankruptcy-related needs of the firm’s clients. We hope and expect that our successful year will be matched in 2013, and we look forward to working with you in the coming year.

Financial Restructuring Recap:In-Court and Out-of-Court Solutions to Leverage
WilmerHale’s Bankruptcy and Financial Restructuring Group achieved substantial success in complex financial restructurings, both in and out of court. Andy Goldman led a team of WilmerHale lawyers in the representation of the Official Committee of Unsecured Creditors in Getty Petroleum Marketing’s Chapter 11 bankruptcy in New York. With WilmerHale’s guidance, the Committee took control of the Chapter 11 case by proposing and obtaining confirmation of the Committee’s Chapter 11 plan of reorganization. Andy Goldman also led WilmerHale’s efforts in obtaining a consensual restructuring of Bicent Power on behalf of the agent for the second-lien lenders, through a pre-arranged Chapter 11 plan confirmed by the bankruptcy court in Delaware. Also in Delaware bankruptcy court, George Shuster led the representation of the first-lien agent and DIP agent in the Chapter 11 bankruptcy of Digital Domain Media Group, a digital special effects production company with credits on films including Transformers, X-Men, and Pirates of the Caribbean. That case involved an accelerated Section 363 auction process resulting in substantial value to the creditors and a preservation of the production business as a going concern. In an out-of-court restructuring, Dennis Jenkins represented an informal group of Inergy noteholders in connection with the exchange and consent solicitation proposed by Suburban Propane Partners, which was part of the proposed purchase by Suburban Propane of the residential propane assets of Inergy. The group’s efforts substantially improved the value of the transaction to the noteholders.
Bankruptcy Litigation Recap: Bankruptcy-Related Litigation Continues to Be Active
WilmerHale’s Bankruptcy and Financial Restructuring Group was also at the forefront of major bankruptcy litigation matters in 2012, including a number of multi-billion dollar actions resulting from spinoff and leveraged buyout transactions that were followed by later bankruptcy filings. Phil Anker is leading a WilmerHale team in the defense of Verizon against a suit on behalf of creditors of Idearc in the federal district court for the Northern District of Texas, related to the spinoff of Idearc from Verizon prior to Idearc’s bankruptcy. Verizon successfully moved to strike the creditor trust’s jury demand, obtained a dismissal of a substantial portion of the claims, and proceeded to a two-week bench trial on the remainder of the claims, on which it is awaiting verdict. Verizon has also retained a WilmerHale team led by Phil Anker and Craig Goldblatt, in connection with claims arising out of the FairPoint Communications bankruptcy, related to FairPoint’s purchase of Verizon’s wireline operations in northern New England. Phil Anker is also representing financial institutions in their defense of claims arising from the Lyondell and Tribune Company bankruptcies, related to the leveraged buyouts that preceded those bankruptcy filings, as well as other financial institutions in their defense of claims relating to the bankruptcies of Refco and the SPhinX Funds. Andy Goldman is pursuing claims of the Getty Petroleum Marketing estate against multi-national defendant Lukoil, related to Lukoil’s spinoff of Getty, following the assignment of those claims to a liquidating trust through Getty’s confirmed Chapter 11 plan. Craig Goldblatt is also representing an array of derivatives counterparties in ongoing disputes arising out of the Lehman Brothers bankruptcy.
The group has other litigation assignments on behalf of noteholders and other similar creditors. Phil Anker and George Shuster are representing a hedge fund creditor in connection with a series of issues arising out of the American Airlines Chapter 11 case, including issues related to municipal conduit financing claims and potential fraudulent transfer claims. Jim Millar is representing a minority secured bondholder in litigation in the New York Supreme Court to enforce its claims against the issuer, Cleveland Unlimited, following an out-of-court debt-for-equity exchange to which the bondholder did not consent. George Shuster is representing noteholders in defense of equitable subordination claims commenced against them by the trustee for Pelikan Technologies in its Northern District of California Chapter 7 bankruptcy.
Other litigation assignments involve a variety of clients and suits. Craig Goldblatt, Dennis Jenkins, and Jim Millar are continuing to represent a leading national mortgage servicer in connection with a number of disputes in bankruptcy courts across the country relating to the treatment of home mortgages in Chapter 13. Andy Goldman and George Shuster successfully represented corporate vendor defendants in a number of multi-million dollar preference suits brought by the liquidating trustee for Circuit City.
In the cross-border arena, George Shuster is representing parties in interest in the Delaware Chapter 15 case of Elpida Semiconductor, which is also subject to bankruptcy proceedings in Japan, and the New York Chapter 15 case of Upper Deck International, which is also subject to bankruptcy proceedings in The Netherlands. George Shuster also continues to represent a number of foreign banks in connection with the claims pursued by the Fairfield Funds in their Chapter 15 cases in New York and liquidation proceedings in the British Virgin Islands.
Distressed M&A Recap: Section 363 Sales Continue to Attract Significant Interest
The distressed M&A market has remained active in 2012, and the WilmerHale Bankruptcy and Financial Restructuring Group has been engaged by a number of sellers and buyers in Section 363 sale transactions. Andy Goldman represented buyers Transportation Management Services and MV Transportation in two separate purchases of the assets from Coach America through Section 363 sales in the Delaware bankruptcy court. George Shuster assisted Eastman Kodak Company in the proposed Section 363 sale of its patent portfolio, and has been engaged by a pharmaceutical industry client in its bid to purchase assets in a Section 363 sale, both in the New York bankruptcy court. In these representations, which involved fast-paced and complex sale structures and documentation, the Bankruptcy and Financial Restructuring Group relied heavily on the transactional expertise of WilmerHale’s corporate partners, including Mark Borden, Jay Bothwick, and Justin Ochs. In another aspect of distressed M&A representation, Jim Millarassisted the independent board members of a pharmaceutical company in evaluating the sale of its assets to a strategic buyer in a distressed context.
Bankruptcy Policy Recap: The Evolving Statutory and Regulatory Background
Craig Goldblatt and Jim Millar, along with appellate partner Danielle Spinelli, are working with the Loan Syndication and Trading Association (LSTA) in connection with the American Bankruptcy Institute (ABI) Commission to Study the Reform of Chapter 11, and have provided testimony to the commission on several occasions regarding the protection of secured creditor rights in the bankruptcy process. Craig Goldblatt and Danielle Spinelli also represented the LSTA as amicus curiae in the recent US Supreme Court case regarding the right of a secured creditor to credit bid its claim in bankruptcy, RadLAX Gateway Hotel, LLC v. Amalgamated Bank. Phil Anker, Craig Goldblatt, and Danielle Spinelli were also recently retained by the Securities Industry and Financial Markets Association (SIFMA) to represent it, as amicus curiae, in a Second Circuit appeal arising out of the Madoff bankruptcy that raises significant questions about the scope of the Bankruptcy Code’s safe-harbor provisions relating to securities contracts. Craig Goldblatt, Mitchel Appelbaum, Dennis Jenkins, and Jim Millar are continuing to represent a leading mortgage servicer in connection with its residential mortgage business, helping the bank to navigate the evolving policy and regulatory regimes in that area. These efforts, which draw on WilmerHale’s substantive bankruptcy knowledge as well as its depth of experience in the trial and appellate litigation and regulatory practice areas, display the broad perspective with which WilmerHale’s Bankruptcy and Financial Restructuring Group approaches its work.


What We Do
WilmerHale’s Bankruptcy and Financial Restructuring Group specializes in financial restructuring, bankruptcy-related litigation, and distressed investment advice for corporate and financial institution clients. We represent creditors, investors, and buyers of distressed counterparties; defendants in litigation in bankruptcy court or implicating bankruptcy and insolvency law; and debtors in their financial restructurings.
Who We Are
WilmerHale’s Bankruptcy and Financial Restructuring Group is led by nine partners across the firm’s New York, Boston, and Washington DC offices. For more information, please contact us.

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