Bankruptcy & Reorganization
Potter Anderson & Corroon has represented parties in virtually every major Chapter 11 bankruptcy case filed in Delaware over the last 25 years, and in many other major cases around the country. Our breadth of experience enables us to bring unique insight to our clients.
We represent the full range of participants in bankruptcy cases, including debtors, official and unofficial committees, banks and other financial institutions, shareholders and acquirers of assets. These representations span a host of industries including, airlines, automotive manufacturing, retailers, health care, steel and telecommunications.
- Represents key constituencies in nearly every Delaware “mega” bankruptcy case beginning with serving as counsel to the Official Committee of Equity Holders of Continental Airlines Holdings, Inc. in 1990 and continuing through today with representations of major financial institutions in the Washington Mutual, Inc., Tribune Company and SemCrude L.P. cases
- Represents clients in complex commercial litigation spawned by bankruptcy, including valuation proceedings, fraudulent conveyance cases, corporate breach of fiduciary duty cases and multi-million dollar preference actions.
- Advises in other creditors’ rights areas including out-of-court restructurings/workouts, state law receiverships and dissolutions, state law foreclosure and secured transactions.
- Provides opinions to the financial community in such areas as substantive consolidation, fraudulent conveyances, and bankruptcy remote entities.
- Guides clients through receivership proceedings and dissolutions under state law as an alternative to bankruptcy proceedings under federal law, advising on both judicial and extra-judicial dissolution and winding-up procedures under the Delaware General Corporate Law, as well as state law receivership proceedings.
- Hotels Union Square Mezz 1, LLC, Case No. 10-10971 – Lead counsel in representing the mezzanine level entities that own and operate the W Hotel Union Square, one of the flagship properties of the W Hotel brand, in its chapter 11 bankruptcy cases. Potter Anderson was involved in significant litigation among the debtors and their lenders in the case related to the validity of such obligations as well as the authority of the debtors to restructure the hotel. Ultimately, Potter Anderson was able to achieve a global settlement amongst all parties. Potter Anderson is in the process of seeking confirmation of a Plan of Liquidation that will effectuate that settlement by achieving an orderly sale and restructuring of the hotel property. In addition to its bankruptcy department, Potter Anderson relied upon its preeminent corporate litigation group to support the firm’s efforts.
- FormTech Industries, LLC, Case No. 09-12964 – Lead counsel in representing FormTech Industries in their chapter 11 bankruptcy cases. FormTech, during their chapter 11 cases, sold substantially all of their assets to the holders of their first lien debt for a credit bid and assumed liabilities valued in excess of $50 million. Potter Anderson continues in the representation as FormTech operates as a contract manufacturer for the purchaser, HHI Forge, while HHI Forge completes the acquisition. Potter Anderson is in the process of wrapping up the affairs of FormTech and will be formulating a plan of liquidation to deal with the remaining assets and liabilities. During the course of its representation, in addition to drawing on the resources of its bankruptcy department, Potter Anderson relied upon its depth of experience in labor, benefits and corporate law.
- WellPoint Systems, Inc., Case No. 11-10423 – Lead U.S. counsel to Ernst & Young, the Canadian receiver of Wellpoint, in its chapter 15 filing. During Wellpoint’s chapter 15 case, substantially all of its assets were sold at an auction managed by Potter Anderson. The auction yielded an increase in value from an initial $23 million stalking horse bid to an ultimate sale price in excess of $36 million. Potter Anderson represented the receiver in all facets of the chapter 15 case from the negotiation of the Asset Purchase Agreement to wind-down of WellPoint’s remaining operations and employee benefit plans, drawing on Potter Anderson’s depth in labor, benefits and corporate law.
- MMH Media Holdings, LLC, Court of Chancery – Lead counsel to The McManigle Company, the assignee in an Assignment for the Benefit of Creditors (ABC) in the Court of Chancery. Potter Anderson oversaw various aspects of the wind-down of MMH’s business operations including the liquidation and collection of remaining assets, termination of employee benefit plans and a claims process for MMH’s unsecured creditors. The firm also handles ABC proceedings on behalf of Weaver Holdings, Inc. and TSHS, LLC.
Financial Institution Representations
- Chem RX Corporation, Case No. 10-11567 – Co-counsel representing a major financial institution as prepetition first lien agent. Potter Anderson is assisting with all facets of the case including cash collateral issues, sale/auction issues, intercreditor issues and plan confirmation. The firm also interfaced with the Office of the United States Trustee on behalf of the client. Chem RX was a leading long-term care pharmacy serving multiple institutions.
- Washington Mutual Inc., Case No. 08-12229 – Representation of the bondholders of Washington Mutual Bank.
- Tribune Company, Case No. 08-13141 – Co-counsel to a major lender and advisor to Tribune, a multi-billion dollar media enterprise in a highly watched bankruptcy case. During this past year, among other matters, Potter Anderson has assisted in advising client on issues related to competing plans of reorganization and numerous adversary proceedings asserting fraudulent conveyance, breach of fiduciary duty and other complex causes of action.
- Peregrine I, LLC, Case No. 11-11230 – Co-counsel in represention of agent of secured lenders to debtor that owns drilling vessel subject to Brazilian law. Potter Anderson has advised regarding significant issues related to trustee disputes, DIP financing and general bankruptcy matters.
- SemCrude, L.P., Case No. 08-11525 – Co-counsel in representation of administrative agent to the prepetition and postpetition DIP lenders in connection under an Amended and Restated Credit Agreement, with approximately $2.5 billion in outstanding loans and letters of credit. Potter Anderson has assisted in all facets of the case, beginning with an extended contested DIP financing and cash collateral hearing continuing through a contested confirmation hearing and post-confirmation proceedings.
Creditors’ Committee Representations
- Vion Pharmaceuticals, Inc., Case No. 09-14429 – Co-counsel to the Official Committee of Unsecured Creditors of Vion, a clinical stage cancer research and development pharmaceutical company. The Committee was essential in implementing an orderly wind-down strategy that incentivized management to minimize costs and maximize creditor recoveries. The Committee was ultimately successful and ensured that over $12 million was available for unsecured creditors, an estimated recovery of nearly 20% on claims. Post-confirmation, Potter Anderson has continued its representation of the Vion Liquidating Trust which is seeking out transactions to monetize Vion’s intellectual property.
- Broadstripe, LLC, et al., Case No. 09-10006 – Co-counsel to the Official Committee of Unsecured Creditors of Broadstripe, a cable television system operator. The Committee was successful in obtaining unsecured creditor recoveries from a settlement with the debtors’ lenders resulting from hotly contested litigation regarding avoidance of the lenders’ security interests in the debtors’ collateral. That settlement has been tentatively approved subject to the sale of the debtors’ businesses. The Committee continues to be essential in implementing an orderly sale of the debtors’ business to maximize creditor recoveries.
- Norfolk Southern Corporation: Chrysler, LLC n/k/a Old Carco, LLC (Southern District New York), Case No. 09-50002 and General Motors Corporations n/k/a Motors Liquidation Company (Southern District New York), Case No. 09-50026 – Lead counsel representation of Norfolk Southern in both the Chrysler and GM bankruptcies.
- DBSI, Inc. Case No. 08-12687 – Lead counsel to the State of Idaho Department of Finance in the closely watched bankruptcy proceedings of DBSI, Inc., an Idaho-based investment firm. Successful in winning the approval from Judge Peter Walsh for a court-appointed examiner with authority to probe allegedly fraudulent securities and other transactions made by DBSI. DBSI’s businesses involved more than 12,000 investors and 270 properties throughout the country. Idaho, the state where DBSI is located, was joined by other states in the action, including Alabama, California, Colorado, Hawaii, Montana, Nevada, Oregon, Pennsylvania, South Carolina, Tennessee, and Washington. In what became more than just a bankruptcy case, the State of Idaho alleged a sophisticated investor fraud, among other things, DBSI allegedly used powers of attorney, signed by investors at real estate closings, to convert non-recourse loans to recourse loans—making investors personally liable without their knowledge.
- Barnes Bay Development Company Case No. 11-10792 – Lead counsel to an ad hoc committee of creditors in the Barnes Bay Development Company, a resort development in Anguilla. Potter Anderson represents creditors who placed deposits on home sites in their objections to the Disclosure Statement and Plan of Reorganization. Through Potter Anderson’s efforts, significant changes were ordered to the Disclosure Statement and Potter Anderson is currently in litigation over confirmation of the plan.
Asset Acquirer Representations
- Capmark Financial Group, Inc., Case No. 09-13684 – Representation of a multi-million dollar purchaser of assets in the Capmark bankruptcy. Capmark, formerly GMAC LLC's commercial real-estate arm, was one of the nation's largest commercial lenders. During the course of its bankruptcy it has been selling its assets in preparation for a slow and orderly wind-down. Potter Anderson’s representation involved deftly handling the sale transaction and facilitating the sale process in Delaware Bankruptcy Court.
- Banning Lewis Ranch Company, LLC (The), Case No. 10-13445 – Representation of a multi-million dollar purchaser of assets in the BLR bankruptcy. BLR is developer of a master-planned community in Colorado. The assets of the debtor included 17,700 acres of mostly undeveloped land, and about 2,700 acres of developed real estate. Potter Anderson’s representation involved significant advice in connection with the bidding process, drafting and negotiation of the asset purchase agreement, counsel through the auction process and litigation of the rights of the client through the sale hearing.