Distressed Public Debt and Municipal Insolvency

We provide pragmatic advice and strategic planning for any client involved in a distressed municipal bond transaction, working closely with our Public Finance Group to develop innovative strategies for each municipal transaction. We represent indenture trustees, institutional debt holders, hedge funds and secured lenders in out-of-court workouts and municipal insolvency proceedings. Our clients are in virtually all industry sectors of municipal investment, particularly health care, infrastructure, hotels, manufacturing, education, and housing. We have experience in Chapter 9 cases as well as Chapter 11 and 7 cases.

Energy

Our broad experience and multidisciplinary approach to restructurings in the energy industry has yielded successful results for our clients. Our restructuring lawyers routinely collaborate with Schiff Hardin’s Energy and Public Utilities Practice Group, to provide broad regulatory and industry-focused restructuring and insolvency advice in virtually every energy sector, including oil and gas, ethanol, alternative energy sources, solar and natural gas.  Our clients include domestic and international manufacturers and distributors of energy resources. Notable representations include:

• The Power Company of America, L.P. – Represented an electricity trading company sued for fraudulent transfer and preference claims and successfully organized a defense group to coordinate over $200 million in claims. Arbitration led to a successful resolution in favor of the client in the chapter 11 bankruptcy of one of the largest independent power traders in the United States.
• Energy Cooperative, Inc. – Represented a major oil company and mortgagee in a complex bankruptcy, involving environmental and financing issues related to the preservation, cleanup, and disposition of a major refinery.
• Represented the Indenture trustee in failed waste-to-energy plant in West Virginia ($300 million).

Food and Beverage

We have in-depth understanding of the relevant federal and state regulatory laws implicated by restructurings in this industry. This understanding enables us to provide clients in distressed situations with legal and business solutions to complex challenges.

We have served as counsel to several large food and beverage companies across the country in significant bankruptcy proceedings. We understand the unique nature of the product our clients deliver, and the particular rights and regulatory scheme that enables our clients to recover on often perishable commodities delivered to an insolvent or bankrupt customer. We have also represented equipment lenders to franchisees across the country effectively protecting their interests in a sale, a liquidation or transition to another franchisee. Similarly, our restructuring attorneys have advised restaurants and retail food suppliers, navigating them through the restructuring process, making our restructuring lawyers some of the most experienced practitioners in this industry. Notable representations include:

• Representing a leading food and beverage provider in a variety of insolvency matters involving customers, contract parties and suppliers.
• Hostess/Interstate Brands – Represented the purchaser of bakery assets in a three-state area in successive chapter 11 bankruptcies of the seller, including the successful defense in the eighth Circuit Court of Appeals (en banc) of efforts by the seller to “resell” the intellectual property by rejecting key licenses.

Health Care

We have substantial experience representing medical centers, hospitals, CCRCs, nursing homes and similar facilities, along with lenders providing financing to health care facilities and other interested parties. Through these representations, we have gained a comprehensive knowledge of the intricacies involved in healthcare industry restructurings.  Our restructuring lawyers’ notable representations include:

• Representing a governmental agency in connection with its loans to hospitals and related facilities in distress, including the chapter 11 filings of TLC Health Network and Sound Shore Medical Center of Westchester.
• Kidspeace - Represented the Indenture trustee in a chapter 11 case involving a children’s psychiatric hospital in Allentown, Pa. ($50 million).
• Northern Berkshire Healthcare Inc. - Representing Indenture trustee in bankruptcy reorganization of hospital in Berkshire, Mass. ($50 million).

Higher Education

Lenders and borrowers of obligations owed by universities, charter schools and other higher education facilities have engaged us when confronted with a need to restructure debt, or to negotiate and resolve regulatory issues. Our insolvency lawyers have provided creative solutions to these complex hybrid issues requiring sophisticated workout and regulatory expertise.

Hospitality

Our diverse bench of restructuring lawyers assists our hospitality clients with an array of real estate, finance, labor, environmental and other legal issues. Our restructuring attorneys are also able to call on Schiff Hardin’s practice groups in each of these areas for capable assistance.

Notable representations include:

• Northwest Airlines, Inc., et al. – Represented a leading global investment banking firm in the airline's chapter 11 filings relating to hotel accommodation services agreements.
• Represented bondholders and indenture trustee in the restructuring of debt on Hilton hotel in Austin, Tex. ($40 million).
• Delta Airlines, Inc. – Represented a leading global investment banking firm in the airline's chapter 11 case relating to hotel accommodation services agreements.

Insurance

We have earned a distinguished national reputation for representing insurers in cases across the country, effectively resolving claims and defending coverage issues asserted by class action plaintiffs, debtors, directors and officers, and other insolvent insureds. We work closely with Schiff Hardin’s insurance and reinsurance practice on each matter, leveraging their expansive national and international experience representing clients in the UK, the EU, Bermuda and Japan.

Our restructuring lawyers’ notable representations include the representation of The Catholic Mutual Relief Society of America and The Catholic Relief Insurance Company of America in Diocese chapter 11 filings across the country.

Real Estate and Construction

We frequently represent lenders, landlords, brokers, architects, construction companies and other creditors in real estate and construction insolvency proceedings, working closely with our real estate, finance and construction groups to develop effective and creative strategies to achieve our client’s objectives and maximize recoveries.

While representing landlords and parties to executory contracts with a debtor, we have created new law on the treatment of unexpired leases through bankruptcy, and have forged other novel issues in cases furthering clients’ interests in numerous jurisdictions.

As in all industries, interested parties may have competing interests, requiring a unique perspective. Our extensive work with parties across the real estate industry has given us an appreciation for all such perspectives. Notable representations include:

• Halo – Represented a national real estate developer of the debtor’s prominent headquarters building in the chapter 11 restructuring of a national advertising and promotion firm based in Chicago, including making new law favorable to landlords in immediate recovery of pass-through charges during the bankruptcy.
• Montgomery Ward – Represented a national real estate developer in the Delaware bankruptcy of the national retailer in Delaware, including making new law favorable to landlords in immediate recovery of prepetition tax pass-through charges.
• Pasquinelli Homebuilding LLC – Representation of the chapter 7 trustee in the liquidation of a national homebuilder, including fraudulent transfer and breach of fiduciary duty litigation against insiders of the debtor
• Madison Management Group – Represented official unsecured creditors' committee in the successful appointment of a chapter 11 trustee and helped develop the facts and theory related to fraudulent conveyance and alter ego litigation later brought by the chapter 7 trustee seeking over $100 million from insiders of the debtor.
• 785 Partners, LLC – Represented Real Estate Investment Trust (REIT) in connection with its $106 million loan secured by a New York apartment building, obtaining a full recovery, including title to the building and a multi-million dollar cash payment.
• The Vue Orlando LLC – Represented the Note-A Senior Lenders in the workout of a $124 million loan facility secured by one of the largest luxury condominium developments in Orlando, FL.
• Waterscape LLC – Represented the Official Committee of Unsecured Creditors involving a newly developed $160 million New York hotel and condominium building, resulting in a 100 percent recovery for unsecured creditors.
• NVS Liquidating Company, Inc. et al. – Represented the Official Unsecured Creditors' Committee in the chapter 11 filing of an insolvent contractor, establishing an innovative arrangement to resolve mechanics’ lien claims and property owners’ defenses to the payment of accounts receivable.
• Represented indenture trustee and holders of municipal and corporate bonds relating to chapter 11 case of one of the largest real estate developments in California.
• Represented indenture trustee and bondholders in restructuring of office building in Harrisburg, PA ($90 million).
• EnCap Golf Holdings LLC – Represented Official Committee of Unsecured Creditors, involving a complex brownfield remediation and development project, with more than $1 billion in filed claims and nearly $300 million secured by hundreds of acres in the New Jersey Meadowlands.
• Shelbourne North Water Street, L.P. – Represented architectural firm in connection with the chapter 11 case involving the Chicago Spire.

Retail

We routinely represents creditor’s committees, landlords and vendors in many of the largest and most complex retail restructurings.  Our lawyers have substantial experience developing strategies to successfully employ the restructuring tools available to each retail client’s needs. As competition from online sales increases, traditional retailers have come under increasing financial pressure.  Our restructuring lawyers understand the unique aspects of retail restructuring, including the particular rights available to the sellers of product to an insolvent or bankruptcy customer, and the competing need of the retailer to obtain the product and the necessary funding to continue operating. Notable representations include:        

• RadioShack Corporation, et al. – Representing prominent commercial landlord on multiple unexpired leases/licenses and other.
• Escada (USA) Inc. – Represented prominent commercial landlord involving unexpired leases of real property.
• Ashley Stewart Holdings, Inc. – Represented prominent commercial landlord involving unexpired leases of real property.
• Representing a major supplier of a national retail chain with respect to pre-bankruptcy insolvency advice ensuring payment of receivables for continuing trade.
• Hostess/Interstate Brands – Represented the purchaser of bakery assets in a three-state area in successive chapter 11 bankruptcies of the seller, including the successful defense in the 8^th Circuit Court of Appeals (en banc) of efforts by the seller to “resell” the intellectual property by rejecting key licenses.
• Represent commercial property and real estate brokers in insolvency matters.
• Steve & Barry’s LLC – Represented prominent commercial landlord with unexpired real property leases.
• BH S&B Holdings LLC – Represented prominent commercial landlord with unexpired real property leases.