A Chapter 11 bankruptcy filing causes significant dislocation and stress for the business and puts enormous pressure on a debtor-in-possession’s management.  Practical issues such as creditor dissatisfaction, employee morale and financing of the going concern are often as important, if not more important, than the legal and reporting issues facing a Chapter 11 debtor.  Businesses select Kramer Levin Naftalis & Frankel LLP as their Chapter 11 counsel because of the firm’s extensive, broad-based legal and practical experience dealing with such issues.  Among other things, Kramer Levin’s attorneys are adept at obtaining and negotiating debtor-in-possession financing packages, negotiating with pre-petition trade creditors, financial creditors and equity holders, designing and implementing employee retention programs, conducting sales of nonessential business lines, and negotiating and documenting plans of reorganization with a wide array of official creditor committees and other estate constituencies.

Attorneys in Kramer Levin’s Corporate Restructuring and Bankruptcy Department have significant experience representing and reorganizing a diverse group of distressed businesses in and outside of Chapter 11:

• Malden Mills, Inc. — Kramer Levin served as debtor’s counsel to Malden Mills, Inc., a worldwide leader in the research, development, manufacture and branding of synthetic high performance fabrics including the Polartec global brand. As lead counsel in this difficult, fast-paced chapter 11 case, Kramer Levin attorneys worked with the debtor’s management and financial advisors to successfully (i) stabilize the business as a going concern, (ii) negotiate sufficient access to cash collateral to run the business and satisfy all administrative claimants and (iii) negotiate and document the sale of substantially all of the debtor’s assets with not one, but two potential purchasers. The consummation of the sale preserved the 100 year old debtor’s domestic manufacturing facility and the jobs of almost 800 employees. All of the above was accomplished in less than 65 days.
• Berry-Hill Galleries, Inc. — Kramer Levin served as debtor’s counsel to Berry-Hill Galleries, a world class art gallery operated by members of the Hill family for over 100 years. This extremely successful chapter 11 case featured: (i) confirmation and consummation of a plan of reorganization that provides for payment in full, plus interest, of all allowed claims; (ii) the stabilization of a fragile business that was beset by litigation on multiple fronts and confronted with significant liquidity concerns; (iii) the negotiated (rather than litigated) resolution of the significant disputes with the Debtors’ pre-petition lender, which led to a consensual cash collateral stipulation; and (iv) the negotiation and documentation of DIP and exit financing, necessary to provide the debtor with sufficient liquidity to propose and consummate the plan of reorganization.
• Elite Model Management — Kramer Levin served as debtor’s counsel for Elite Model Management, one of the leading model management companies in the United States and part of the world-wide Elite network. During the chapter 11 case, we successfully managed the sale of Elite’s business as a going concern under Section 363 of the Bankruptcy Code and negotiated a consensual chapter 11 plan that resolved the class action claims and other significant litigation claims against the company pending simultaneously in federal, state and bankruptcy court.
• Micro Warehouse, Inc. — Kramer Levin served as debtor’s counsel to Micro Warehouse and its affiliates, worldwide suppliers of computers and computer accessories. In that regard, we successfully negotiated and documented the sale of substantially all of Micro Warehouse’s domestic and international assets.
• Cross Media Marketing Corporation — Kramer Levin represented the debtor in the case of Cross Media Marketing Corporation, a substantial seller of magazine subscriptions to end-users through direct and cross-channel marketing. We negotiated a plan that successfully sold the Debtor’s assets as a going concern.
• Island Mortgage— Kramer Levin represented the Trustee in the chapter 11 proceedings concerning Island Mortgage, a mortgage banker and broker with over $1 billion in annual originations, and Island Mortgage’s corporate affiliates. The firm established, through litigation and negotiation, a comprehensive procedure to sell over $90 million in mortgages in the debtor’s portfolio, many of which were subject to competing claims. We also aggressively investigated and litigated over allegations of fraud on the part of the debtors’ principals that were ultimately substantiated.
• Sharp International — Kramer Levin represented the debtors in the chapter 11 reorganization of Sharp International, an importer and distributor of watches, clocks and mechanical pencils. Pursuant to a highly competitive auction, the firm successfully sold substantially all of Sharp’s assets. Kramer Levin also conducted an extensive investigation into massive financial irregularities by Sharp’s former principals and successfully prosecuted numerous causes of action against insiders and others arising out of that misconduct.
• Atlantic Gulf Communities Corporation — In the case of Atlantic Gulf Communities Corporation, Kramer Levin acted as debtors’ counsel to this developer of luxury resort projects, which filed a pre-negotiated chapter 11 reorganization case. The firm successfully negotiated cash collateral and DIP financing arrangements, and assisted the debtors with the development of a plan of reorganization. Prior to the filing, we negotiated a restructuring plan to be implemented through the chapter 11 bankruptcy process with the debtors’ pre-petition secured lenders and preferred stockholders.
• The Wiz — Kramer Levin acted as debtor’s counsel in the chapter 11 filing of The Wiz, which was one of the largest consumer electronics retailers in the Northeast. Confronted with severe liquidity problems, The Wiz was on the verge of liquidation when Kramer Levin successfully negotiated a sale of the company to a subsidiary of Cablevision Entertainment. The firm successfully concluded The Wiz’s bankruptcy cases by negotiating a confirmed liquidating plan of reorganization that pays all secured, administrative and priority claims in full, and provides a modest distribution to unsecured creditors.
• IMC Mortgage —Kramer Levin represented IMC Mortgage in connection with its successful negotiations with the holders of in excess of $1 billion of debt and IMC’s preparation for a chapter 11 proceeding. Ultimately, an out-of-court consensual restructuring was effectuated.
• Hills Stores Corporation — Kramer Levin represented Hills Stores Corporation in its merger with Ames Stores. The merger was accomplished via a tender offer for Hills’ outstanding common and preferred stock and senior notes. Because of uncertainty surrounding whether or not the tender offer and merger would be successful and accomplished out of court, the firm was prepared to commence a chapter 11 proceeding for Hills and its affiliates.
• Kash n’ Karry — Kramer Levin represented the company in the “prepackaged” bankruptcy of the Kash n’ Karry supermarket chain. The plan, which was consummated only 33 days after the petition date, featured the conversion of a significant amount of debt to new equity, the exchange of certain senior indebtedness into new notes and the infusion of new capital into the company by certain existing shareholders.