Bankruptcy and Restructuring

One of the most important cases in the history of our firm was the 1934 equity receivership of Hoosac Mills in the Massachusetts District Court and the receiver's unsuccessful attempt in that proceeding, supported by Sutherland, to disallow the government's claim for cotton processing taxes. The receiver, and Sutherland clients, eventually won, in a 1936 decision of the Supreme Court of the United States.

In describing our Bankruptcy and Restructuring practice, we mention this 1934 matter to underscore how long Sutherland has been working with troubled companies. But we also cite Hoosac Mills to highlight that even when there was less specialty legal work, we have targeted our restructuring practice to the sectors and financial products where we have recognized strengths. Currently, these lie in energy, real estate, structured finance and derivative products, credit card and payment systems, and tax and REMIC structures.

Even within these targeted areas, our Bankruptcy and Restructuring Group can cite substantial experience across the workout spectrum: negotiation of out-of-court consensual restructurings; litigation and purchase and sale transactions in state insolvency proceedings and federal bankruptcy cases; and real estate and UCC liquidations and foreclosures. Group lawyers document both domestic and cross-border workout arrangements; counsel debtors, their owners, managers, and investors; advise creditors of troubled enterprises; and, most recently, represent special servicers and the providers of debt, mezzanine, and equity capital with respect to non-performing securitized loans, CDOs, and CLOs. Sutherland is best in complex financial restructurings that require the involved lawyers to understand not just insolvency issues but also the relevant business relationship protocols, corporate governance rules, and industry practices.

Group lawyers have recent experience with receivership proceedings in several states, as well as with involuntary bankruptcy cases, both for defendant debtors and petitioning creditors. We have played major roles in national Chapter 11 reorganizations involving energy, entertainment, wireless telecom, mortgage lending and retail companies. The Group is regularly called on in various phases of bankruptcy and debtor-creditor litigation, particularly in defending avoidance claims and in pursuing foreclosure and guaranty enforcement actions.

A leading part of the practice is energy-related: the Group includes a team of lawyers who focus their efforts on legal and business issues arising from the bankruptcies of energy companies. The team provides advice on numerous industry-specific issues relating to forward contracts, swaps, tolling agreements, and options that are outside the areas of expertise of most firms that provide insolvency advice. Sutherland lawyers also have represented both debtors and creditors in real estate bankruptcies and have dealt with all aspects of these cases, including dismissal for bad faith, protection of rents, and attempts by debtors to "cram down" secured creditors' positions.

Lawyers in the Group work closely with the firms that regularly serve as turnaround advisors in major insolvencies. We have good working relationships with the leading debtor lawyers in Wilmington, New York, Chicago and Los Angeles.

In recent assignments, lawyers from the Bankruptcy and Restructuring Group have:

Served on the Unsecured Creditors Committee in the Chapter 11 of the largest U.S. uranium trading organization;
Served on the Unsecured Creditors Committee and post–bankruptcy Oversight Committee (with respect to liquidation of real estate and insurance interests) in one of the largest administratively-consolidated Chapter 11 cases ever filed by an individual;
Served as special counsel responsible for directing the liquidation of the trading "book" of a major energy trading entity in Chapter 11;
Served as Unsecured Creditors Committee counsel in the Chapter 11 of a major furniture retailer that successfully completed its sales and reorganization in 2007;
Represented public companies, private purchasers, and equity funds in the sale and acquisition of operating companies out of Chapter 11 cases in the bankruptcy courts in New York, Chicago, Dallas, Santa Barbara, Wilmington and Atlanta;
Represented credit card issuers on significant chargeback issues in major retail and merchant bankruptcies;
Represented a publicly-traded technology company in systems and executory contract disputes with bankrupt technology and telecommunications companies;
Completed an out-of-court restructuring of animation company debt owed to Japanese and domestic creditors;
Represented senior secured lending groups in debt restructurings of wireless companies located in Alaska, Michigan, Missouri, California and Georgia;
Represented a major automobile manufacturer in franchise transfer and other issues in dealer bankruptcies; and
Served on the LSTA Amicus Brief Committee in substantive consolidation appeals to federal circuit courts.