Creditors' Rights and Bankruptcy
Our attorneys represent both debtors and creditors in all aspects of formal bankruptcy proceedings, out-of-court workouts and restructurings, and in developing and negotiating overall financial strategies. Our services include:
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Representing purchasers of assets from, and sellers of assets by, companies undergoing reorganization.
Negotiating, litigating, and vetting Section 363 sale procedures.
Representing both plaintiffs and defendants in breach of fiduciary claims against directors and officers.
Litigating claims and adversary actions in Chapter proceedings.
Serving as counsel to creditors' committees, trustees, liquidating agents, receivers, and assignees for the benefit of creditors.
Representing debtors in bankruptcy.
Section 363 Asset Sales
Gould & Ratner has been retained by parties involved in asset sales under Section 363. Representative experience in this area includes:
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Clark Retail Enterprises. Represented a major commercial finance company which was the mortgagee for 46 service stations and convenience stores leased to Clark Retail Enterprises by its second-tier subsidiary corporation. Negotiated terms and conditions of Section 363 sale on behalf of secured creditor of service stations and convenience stores.
Spiegel/Eddie Bauer. Represented successful bidder in two Section 363 auction sales of assets from retail debtor with locations in the U.S. and Canada. Negotiated definitive purchase agreements in connection with both auctions.
Trailmobile Trailer, LLC. Represented purchaser who acquired all of the assets of a truck trailer manufacturer for $10 million pursuant to Section 363.
Lawrence Brothers, Inc. Representation of Unsecured Creditors Committee in the Chapter 11 bankruptcy case of a hardware manufacturer, including objection to Section 363 sale which appeared to be collusive.
865 Larrabee, L.L.C. Representation of Chapter 11 commercial real estate debtor, including sale of commercial real estate through Section 363 sale. As counsel to the debtor we prepared all Section 363 pleadings, the definitive purchase agreement, and conducted the auction.
Deerpath Group Inc. Representation of buyer of significant assets of debtor pursuant to Section 363. Debtor provided business advisory services to major corporate clients investing equity in real estate and energy projects including leases, project finance, and securitization deals.
Allied Products Corporation. Representation of prepetition purchaser of assets objecting to the Section 363 sale of historical occurrence-based general liability insurance policies which provided coverage for asbestos claims.
Valley Rivet Company, Inc. Represented Chapter 11 trustee in the sale of the debtor's assets; assisted the trustee in negotiating a definitive asset purchase agreement; and arranged to auction the business by establishing a sale process to solicit higher and better bids.
Chapter 7 Panel Trustee. One of our partners served as a panel trustee for the Northern District of Illinois and we have represented a number of panel trustees in Illinois and other jurisdictions. In connection with these roles we have been involved in a significant number of Section 363 sales.
Fraudulent Transfer and Directors and Officers Litigation
Gould & Ratner has been retained by parties involved in fraudulent transfer and directors and officers litigation. Representative experience includes:
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Gould & Ratner represented the creditors' committee in the Joy Recovery Technology Chapter 11 case. The firm also represented the liquidating trustee of the liquidating trust established pursuant to Joy's Chapter 11 plan, which commenced litigation seeking to recover a fraudulent transfer in excess of $2 million. After a lengthy trial, the judge found in favor of our client and entered a judgment, totaling approximately $4.8 million, against two of the company's shareholders.
The firm was retained by a former principal shareholder of a "quick print" franchising corporation, which filed for bankruptcy in the Bankruptcy Court for the Eastern District of Michigan. The company's creditors filed to recover more than $14 million in alleged preference and fraudulent transfers, which our client allegedly had taken out of the corporation in the period preceding the bankruptcy. We settled the case on very favorable terms after extended litigation and a lengthy mediation.
We recently represented three of the seven former directors of Circuit Systems, Inc., a circuit board manufacturer, which filed a liquidating Chapter 11 case. Post confirmation, the liquidating trustee brought an action seeking multi-million dollar damages for alleged pre-petition negligence by the debtor's board of directors. We successfully resolved the lawsuit after mediation before former Bankruptcy Judge Barliant.
Other Bankruptcy Matters
Gould & Ratner has represented clients in high profile bankruptcy cases and other sophisticated creditors' rights disputes. Examples of our work in this area include:
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Gould & Ratner served as Chicago counsel to the beneficiary of trusts pursuant to which United Airlines leased two 737-300 and two 757 airplanes from the trustee/owner. The firm's engagement focused on the terms pursuant to which United Airlines was retaining the airplanes while making lease payments. This was the largest airline bankruptcy in history.
We were Chicago counsel to a group of real estate partnership interests in the K-Mart Chapter 11 case that owned 37 of the partnership/lessor partnerships which leased various store sites to K-Mart throughout the country. The firm's engagement principally focused upon the terms pursuant to which K-Mart either assumed or rejected various of the leasehold interests as well as the filing and allowance of cure claims and rejection claims on behalf of the landlord interests.
We represented a large commercial finance company in which it sought recovery pursuant to the financing documents contained in a license agreement for certain software which was licensed to a mortgage company by one of the world's largest software companies. The matter was successfully resolved, based upon an agreed settlement between the parties. The issues that were involved in this matter included enforceability under the UCC of certain "hell-or-high water" language contained in the finance documents.
The firm represented one of the largest manufacturers of truck trailers in North America, in its $10 million claim against the guarantors of a settlement agreement between the manufacturer and a Detroit-area dealer and distributor. As part of the settlement agreement, the dealer/distributor pledged security interests and mortgages upon numerous personal assets held by the owners, mainly real estate interests located throughout the State of Michigan. Ultimately, they filed for Chapter 11 and we were able to arrive at an amicable settlement in which they agreed to auction or sell many of their real estate interests for the benefit of the manufacturer and agreed to waive any litigation and claims they held against our client.
The firm has represented the small business division of a major commercial finance company in numerous litigation matters involving claims against a myriad of financially troubled entities. The actions have involved foreclosure of security interests, either in real property or personal property.
Gould & Ratner has served as special UCC and bankruptcy law counsel to the plaintiffs' law firm in the case of Price v. Philip Morris USA Inc., which prior to Gould & Ratner's retention obtained a $10 billion judgment against Philip Morris USA, on behalf of the class consisting of the citizens of Illinois who purchased Marlboro Lights and Cambridge Light cigarettes from approximately 1970 onward. Gould & Ratner's involvement has focused on the granting and perfection of a security interest in the assets of Philip Morris which were pledged to secure a supersede as bond approved by the trial court.