Debt Dialogue: June 2016
SEC Enforcement Action Highlights Need for PE Fund Advisers to Address Potential Broker-Dealer Issue
Residential Capital — Kramer Levin represented the Official Committee of Unsecured Creditors in the Residential Capital (“ResCap”) bankruptcy case, the largest bankruptcy of 2012. ResCap was a wholly-owned subsidiary of Ally Financial, Inc.(formerly known as GMAC, LLC), and serviced over 2.4 million domestic residential mortgage loans with a value of approximately $374 billion. Kramer Levin played a key role in the auction process for the sale of Res Cap’s servicing and origination business, and ultimately was successful in helping to negotiate a $1 billion increase in value to the sale price for a total purchase price of approximately $4.5 billion. Kramer Levin led the Committee’s efforts in pre-trial litigation regarding an unprecedented $8.7 billion settlement of RMBS “put-back” claims in the chapter 11 case, and conducted an investigation into certain prepetition related-party transactions, including those between the Debtors and Ally Financial. In May 2013, Kramer Levin led the negotiation of a $2.1 billion settlement between Ally Financial Inc., ResCap and ResCap’s major creditor constituencies, including each member of the Creditors’ Committee. The settlement resolved numerous contested issues in the bankruptcy cases, including estate and third party claims against Ally Financial that were the focus of the Committee’s investigation, the RMBS “put-back” litigation, as well as other intercreditor issues regarding the treatment and priority of claims in the bankruptcy cases. ResCap confirmed its chapter 11 plan, jointly proposed with the Creditors’ Committee, on December 11, 2013 and emerged from bankruptcy on December 17, 2013.
General Motors Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of General Motors Corporation (“GM”) in the 4th largest bankruptcy case in history. GM is the largest automobile manufacturer in the United States and the second largest in the world. Kramer Levin was instrumental in negotiating significant concessions from the United States Treasury Department for unsecured creditors, including increasing the size of Old GM’s wind-down budget, insuring appropriate transition services for the old estate, securing creditor representation on GM’s wind-down board of directors and ensuring that New GM equity valued at over $6 billion was distributed to GM’s unsecured creditors. Kramer Levin also led GM’s litigation of its asbestos liabilities, and succeeded in reducing GM’s asbestos liabilities from an estimated several billion dollars to $625 million, the first time in history that asbestos liabilities have come in at less than a company’s estimated reserves. In the words of United States bankruptcy Judge Robert Gerber: “...I’ve never seen a creditors’ committee counsel perform as effectively and economically in a Chapter 11 case on my watch, as I saw Kramer Levin perform here.”
Chrysler LLC — Kramer Levin represented the Official Committee of Unsecured Creditors of Chrysler LLC in one of the most important and expedited chapter 11 restructurings on record, and the 7th largest bankruptcy in history. With $39.3 billion in assets shortly before its bankruptcy filing, Chrysler was one of the U.S. “Big Three” manufacturers of cars and trucks. The sale of substantially all of Chrysler’s assets to a new company managed by Italian automaker, Fiat, came only 42 days after Chrysler sought bankruptcy protection. Kramer Levin was instrumental in negotiating modifications to the sale/auction procedures and concessions for unsecured creditors from Chrysler, the U.S. Treasury and the first-lien bank lenders. Kramer Levin played an active and important role on behalf of the Committee in supporting Chrysler’s restructuring efforts through a rigorous sale process and appeals before the Bankruptcy Court, District Court, Second Circuit and the U.S. Supreme Court and through confirmation of a plan of reorganization in April 2010.
Cooper-Standard Holdings, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Cooper-Standard Holdings, Inc., a leading manufacturer of fluid handling, body sealing and noises, vibration control components, systems and modules in passenger vehicles and light trucks. In August 2009, during the worst economic downturn in decades, Cooper-Standard filed for bankruptcy with more than $1.1 billion in funded debt. In a period of less than 10 months, Cooper-Standard confirmed a fully consensual chapter 11 plan that Kramer Levin was instrumental in helping to negotiate and which eliminated over $600 million in funded debt. Given the complexity of Cooper-Standard’s business, the speed at which it reorganized was a substantial accomplishment.
Capmark Financial Group, Inc. — At the time of its filing, Capmark was one of the largest commercial real estate lenders and loan servicers in North America, with assets of approximately $20 billion and liabilities of approximately $21 billion. Kramer Levin represented the Official Committee of Unsecured Creditors in, among other things, over ten complex asset sales by Capmark, including the sale of Capmark’s North American mortgage servicing business to Berkadia within the first few weeks of the case being commenced. Kramer Levin also represented the Committee in formulating and negotiating a comprehensive plan of reorganization that distributed a recovery to unsecured creditors and gave control of the reorganized Company, including the ultimate ownership of Capmark Bank, to unsecured creditors.
Smurfit-Stone Container Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of Smurfit-Stone Container Corporation. Smurfit-Stone is the second largest manufacturer of paperboard and paper-based packaging products in North America and reported approximately $7.450 billion in assets and $5.582 billion in liabilities at the time of its chapter 11 filing. Kramer Levin negotiated a very successful plan for unsecured creditors which allocates 95.5% of the Smurfit-Stone’s equity to unsecured creditors, appoints a new board of directors chosen by the Debtor and the Committee, and implements a revised management compensation plan that Kramer Levin negotiated. The Bankruptcy Court for the District of Delaware confirmed the plan of reorganization, which went effective on June 30, 2010.
Magna Entertainment Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of Magna Entertainment Corporation. Prior to consummation of its plan of reorganization, Magna was the leading owner and operator of horse racetracks in North America, including Santa Anita, Gulfstream and Pimlico Racetrack in Maryland, home of the second leg of racing’s Triple Crown. As of its bankruptcy filing, Magna reported approximately $1.049 billion in assets and $959 million in liabilities. In addition to the successful litigation/negotiation with Magna’s majority shareholder to provide value for unsecured creditors, Kramer Levin also actively negotiated the plan of liquidation and the sales of a number of Magna’s most valuable assets.
Lehman Brothers — Kramer Levin represents the bankruptcy trustees appointed in the insolvency proceedings of Lehman Brothers Treasury Co. B.V. (“LBT”) and Lehman Brothers Securities N.V. (“LBS”) that were commenced in The Netherlands and The Netherlands Antilles, respectively. Collectively, LBT and LBS hold in excess of USD $38 billion in intercompany claims against Lehman Brothers Holdings Inc. and certain of its other debtor affiliates. As part of that representation, Kramer Levin negotiated the terms of an international protocol that provides for the coordination of insolvency proceedings commenced by Lehman’s foreign affiliates that are pending throughout 16 different foreign jurisdictions. Kramer Levin was heavily involved in the negotiations relating to Lehman’s plan of reorganization.
Kramer Levin also represented BONY Mellon and holders of the Main Street/Lehman bonds holding over $750 million in claims in the Lehman Brothers bankruptcy. On behalf of the Main Street bondholders, Kramer Levin brought a motion seeking discovery against Barclays Capital to investigate a potentially unauthorized transfer of Lehman commodities assets to Barclays. Kramer Levin continues to actively represent the Main Street bondholders in investigating certain intercompany transfers and enforcing claims against Lehman.
Patriot Coal Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors in the Patriot Coal bankruptcy case, the third largest bankruptcy of 2012. Patriot Coal Corporation is a leading producer and marketer of coal in the eastern United States, with 10 active mining complexes in Appalachia and the Illinois Basin and 1.8 billion tons of coal reserves. The Company filed for bankruptcy protection in July 2012 with approximately $3.1 billion in liabilities. Kramer Levin, on behalf of the Creditors’ Committee, was the principal advocate for unsecured creditors on all major facets of the case, including, among other things, (i) a lengthy trial related to the Company’s motions to reduce its active employee compensation and retiree healthcare benefits and (ii) an investigation of claims against Peabody Energy Corporation and Arch Coal, Inc. related to retiree healthcare benefit liabilities exceeding $1.3 billion. Through the restructuring process, approximately 4,000 jobs were preserved and the Company exited chapter 11 with an improved balance sheet, new five-year labor agreements with the UMWA, and settlements with Peabody Energy Corporation and Arch Coal, Inc. which provide significant funding for retiree healthcare benefits.
WP Steel Venture, LLC — Kramer Levin represents the Official Committee of Unsecured Creditors in the bankruptcy proceedings of RG Steel, LLC and its subsidiaries, which collectively comprise the fourth largest flat-rolled steel producer in the United States. Faced with rising costs of raw materials and declining prices of steel, the Debtors filed for bankruptcy and, at the demand of their prepetition secured lenders, sought to sell their businesses within less than 60 days of its bankruptcy filing, after minimal pre-bankruptcy marketing efforts. By filing an objection to the DIP facility and proposed bidding procedures, Kramer Levin was able to bring the lenders to the table and negotiate a more reasonable timeline to market and sell the Debtors’ assets to maximize recoveries for all creditors. Kramer Levin is continuing to monitor the sale process, and investigate claims against prepetition secured lenders and identify other potential sources of recovery for unsecured creditors.
American Airlines — Kramer Levin represents Bank of New York Mellon and Law Debenture Trust Company as Indenture Trustees for over $2.2 billion of airport revenue bonds spread among seven airport facilities in the American Airlines case, the second largest bankruptcy filing in 2011. Kramer Levin’s work for bondholders has resulted in the full reinstatement of approximately $230 million of bonds secured by American’s assets at LAX airport, and approximately $240 million of bonds secured by American’s assets at the Tulsa Maintenance Base. Kramer Levin continues to represent holders of over $1.25 billion in bonds secured by American’s assets at JFK Airport in negotiations and potential litigation. In addition, Kramer Levin is actively negotiating with American and its creditor groups regarding a stand-alone plan, a potential merger with U.S. Airways, treatment of the pilots’ union claims, and guarantee claims that its bondholders have against American Airlines.
ASARCO — Kramer Levin represented holders of a majority of outstanding bonds issued by ASARCO LLC. As part of that representation, Kramer Levin represented its clients in filing and prosecuting their own plan of reorganization while opposing any plan that paid creditors less than in full. Due in no small part to those efforts, competing plan proponents repeatedly amended their competing plans throughout a contested confirmation hearing, each time enhancing their treatment of unsecured creditors. Those efforts ultimately resulted in two competing plans that each paid general unsecured creditors the full principal amount of their claims plus post-petition interest and compensation for prepayment, and one of those plans consummated in December 2009.
Hostess Brands, Inc. — Kramer Levin represents the Official Committee of Unsecured Creditors of Hostess Brands, Inc. and its debtor affiliates, one of the largest wholesale bakers and distributors of bread and snack cakes in the United States with approximately $2 billion in unsecured debt. As Creditors’ Committee counsel, Kramer Levin is involved in ensuring maximum recovery for unsecured creditors by overseeing the Debtors’ restructuring and capital infusion process.
W.R. Grace & Co. — Kramer Levin represents the Official Committee of Equity Security Holders of W. R. Grace and Co., a leading specialty chemicals and materials company and a major defendant in mass tort asbestos litigation. Kramer Levin has played a lead role in the bankruptcy court litigation concerning the valuation and treatment of present and future asbestos claims, and, through its work in negotiating the plan of reorganization currently pending before the court, has been instrumental in setting the stage for a substantial distribution to equity holders.
Amalgamated Bank/Pacifica Mesa Studios — Kramer Levin represented Amalgamated Bank, the holder of an approximately $100 million loan that was secured by one of the country’s largest film production studio complexes located in Albuquerque, New Mexico. Kramer Levin structured and implemented a chapter 11 strategy that resulted in confirmation of a plan of reorganization that transferred 100% of the equity of the reorganized debtor to the Bank. We also negotiated and documented a debtor-in-possession financing arrangement. In connection with confirmation of the plan there was significant litigation with a junior secured creditor in the California Bankruptcy Court and the New Mexico State Court.
Dana Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of Dana Corporation, a leading supplier of automotive parts to every major vehicle producer in the world. During the case, the firm addressed numerous issues impacting creditor recovery and the ability of Dana to successfully reorganize, including the large scale divestitures of unprofitable business segments, pension and other post-retirement medical benefits, intercompany claims, the appropriateness of restrictions on trading securities to preserve Dana’s NOL, potential asbestos liabilities, and negotiations with customers and suppliers, and other issues common to automotive suppliers. In December 2007, the Bankruptcy Court confirmed Dana’s plan of reorganization, which received overwhelming creditor support.
Eastman Kodak — Kramer Levin represents an ad hoc group of holders of over $230 million in unsecured claims against Eastman Kodak Company, one of the world’s leading material science companies. As counsel to the ad hoc group, Kramer Levin is ensuring maximum recovery to the claim holders through involvement in the Debtors’ sale of their intellectual property assets and treatment of their foreign and domestic pension liabilities.
Calpine Corporation — Kramer Levin represented Harbinger Capital Partners, Calpine’s single largest creditor, in Calpine’s successful reorganization and restructuring of over $17 billion in debt. The firm was active in all aspects of Calpine’s chapter 11 case on Harbinger’s behalf, including Plan negotiations, settlements of significant claims relating to Calpine’s numerous bond issuances and resolution of corporate governance issues for reorganized Calpine. In addition, the firm represented an ad hoc group of bondholders of Calpine Canada Finance ULC II (a Calpine Canadian subsidiary) in the Calpine restructuring proceedings in the United States and Canada, which ultimately resulted in the payment of our client’s claims in full, including postpetition interest and a negotiated make-whole.
Dura Automotive Systems — Kramer Levin represented the Official Committee of Unsecured Creditors of Dura Automotive Systems, Inc., a leading independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive and recreations and specialty vehicle industries. At the time Dura sought the protection of the Bankruptcy Court in October 2006, it had annual sales in excess of $2.3 billion and approximately $1 billion of outstanding unsecured debt obligations.
Arbor Realty Trust — Kramer Levin represented certain affiliates of Arbor Realty Trust as holders of a first lien loan on the principal assets of a hotel chain in chapter 11 proceedings in Florida. The matter involved litigation with a mezzanine lender and successful negotiation of a consensual plan of reorganization that provided Arbor with a new first lien loan, supported by a substantially tightened collateral package. Kramer Levin also represented Arbor in connection with chapter 11 proceedings of certain affiliates of a nationwide owner/operator of apartment complexes.
Washington Mutual — Kramer Levin represented a significant creditor in the Washington Mutual (“WaMu”) bankruptcy case that, along with several other creditors, defended claims that it improperly traded in WaMu securities while in possession of material nonpublic information. The bankruptcy court entered an order authorizing the Equity Committee to prosecute a complaint for equitable disallowance of these creditors’ claims. In February 2012, after three and a half years and after twice rejecting reorganization plans, Judge Mary Walrath confirmed a plan of reorganization that provided for a successful resolution of all claims against Kramer Levin’s client. Kramer Levin and the firm’s client helped resolve numerous complex issues in the case, leading to a consensual plan that is expected to result in a distribution of more than $7 billion of WaMu’s assets to its stakeholders.
Adelphia Communications — Kramer Levin represented an ad hoc committee made up of 20 noteholders holding approximately $350 million of notes issued by FrontierVision, a subsidiary of Adelphia. Adelphia was sold to Time Warner and Comcast for a record sale price of over $17 billion. Kramer Levin conducted an active, successful litigation and negotiation on behalf of the FrontierVision Noteholders on the critical issues of validity and priority of intercompany claims, allocation of the value from the Time Warner sale between debtor groups, substantive consolidation and plan confirmation.
Sea Containers Ltd. — In the cross-border reorganization of Sea Containers Ltd., Kramer Levin represented five creditors collectively holding a majority of all trade and bond debt. Sea Containers, a Bermuda-based chapter 11 debtor with more than 100 wholly-owned foreign and US subsidiaries, primarily engages in the maritime container leasing business.
Ainsworth — Kramer Levin represented the bondholders of Ainsworth Lumber Company, Ltd. in connection with the 2008 restructuring of Ainsworth. The restructuring involved more than $1 billion in total debt, with approximately $800 million held by the bondholders. The bonds were held by numerous hedge funds and financial institutions, including HBK, Tricap and Barclays. Ainsworth is one of the leading North American forest products companies with operations in both the United States and Canada. The restructuring was implemented in Canada pursuant to the Canadian Business Corporations Act and was one of the largest Canadian restructurings of 2008.
Intelsat, Ltd. — Kramer Levin represented a steering committee of Intelsat bondholders who collectively held $1.978 billion of notes issued by Intelsat or its affiliates. This representation focused on the enforcement and protection of each noteholder’s rights concerning the February 2008 change of control of Intelsat and the related change of control offer.
WCI Steel, Inc. — Kramer Levin represented the holders of $300 million in senior secured notes issued by WCI Steel, the nation’s seventh largest integrated steelmaker. After terminating exclusivity and defeating two plans filed by the debtor and its shareholder, Ira Leon Rennert, Kramer Levin confirmed a Noteholder plan with the unprecedented support of the United Steelworkers of America. The Noteholder plan gave the firm’s clients $100 million in new notes, cash to pay legal fees and expenses, and 99% of the equity of the reorganized company. The old Notes, which traded in the 20s upon WCI Steel’s default in 2003, were trading at about par at the consummation of the Noteholder plan.
United Airlines — Kramer Levin represented Citigroup, Goldman Sachs, Franklin Mutual, UMB and HSBC as holders and indenture trustees of LAX and SFO municipal airport bonds in appellate valuation litigation concerning United’s property at SFO and LAX airports, obtaining a Seventh Circuit ruling that more than doubled the recovery of LAX bondholders.
Northwest Airlines — Kramer Levin represented Citigroup and Bank of New York as holder and indenture trustee for JFK and Wayne County municipal airport bonds in lease recharacterization litigation and chapter 11 plan negotiations with Northwest Airlines. The firm negotiated a successful settlement of Northwest’s treatment of the bonds at more than four times the original offered value to bondholders under Northwest’s initial plan after less than six weeks of litigation and negotiations.
DOV Pharmaceutical, Inc. — Kramer Levin represented an ad hoc group of holders of convertible subordinated debentures of DOV Pharmaceutical, Inc., a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The firm negotiated a successful out-of-court restructuring of the $70 million convertible subordinated debentures that enabled the holders to receive the equity of the company and avoid a chapter 11 filing.
Calpine Construction Finance Corporation — Kramer Levin represented an ad hoc group of the holders of the second lien bonds (the total amount of second lien bond exceeding $400 million) of Calpine Construction Finance Corporation (“CCFC”), a non-debtor subsidiary of Calpine Corporation. On behalf of the group, we negotiated a global restructuring of the second lien indenture and certain intercompany issues between CCFC and Calpine that enabled CCFC to avoid a bankruptcy filing and keep the second lien bonds in place without any reduction to the interest rate.
Bethlehem Steel Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of Bethlehem Steel Corporation, the country’s second largest integrated steelmaker. The Committee was comprised of several indenture trustees, trade creditors, the USW and the PBGC.
Enron — Kramer Levin represented investors holding over $1.2 billion in lender claims against Enron, known as the “Choctaw/Zephyrus Holders.” Through the firm’s efforts, the Choctaw/Zephyrus Holders played a critical role in the Enron disclosure statement and plan process, and negotiated an extremely successful settlement with Enron.
Leap Wireless International, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Leap Wireless International, Inc., the holding company of Cricket Communications, Inc., one of the largest wireless carriers in the country. Prior to Leap’s bankruptcy, the firm represented an ad hoc committee of Leap’s noteholders in connection with their investigation of alleged fraudulent conveyances made by Leap, as well as in connection with negotiations concerning a pre-negotiated plan of reorganization, which was filed on the first day of the bankruptcy case.
Footstar, Inc. — Kramer Levin represented the Official Committee of Equity Security Holders of Footstar, Inc., one of the largest discount/family footwear retailers in the United States. In December 2004, the Debtors proposed a plan that paid creditors in full and reinstated equity interests.
Adelphia Business Solutions — Kramer Levin represented the Official Committee of Unsecured Creditors of Adelphia Business Solutions. This telecommunications case involved a competitive local exchange carrier with over $1.4 billion in outstanding debt. Members of the Committee included bondholders, indenture trustees and trade creditors. Kramer Levin examined the debtor-in-possession financing and negotiated substantial improvements for unsecured creditors.
Genuity Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Genuity Inc., an internet infrastructure company whose primary assets were sold to Level 3 Communications in the bankruptcy case. Kramer Levin also represented the liquidating trust in connection with the resolution of thousands of disputed claims.
MCI and WorldCom — Kramer Levin represented certain MCI subordinated noteholders in litigation in opposition to the substantive consolidation of MCI and WorldCom, achieving a result that boosted the noteholders’ recovery fund from zero under WorldCom’s original plan to 43 to 45 cents in cash and senior notes.
Omni Facilities — Kramer Levin represented the Official Committee of Unsecured Creditors of Omni Facilities, a holding company for several commercial facility maintenance businesses that employed in excess of 2,600 employees.
Dow Corning — Kramer Levin represented the Official Committee of Tort Claimants in one of the largest mass tort bankruptcy cases filed to date in which tort claimants asserted billions of dollars in personal injury claims against Dow Corning arising from the manufacture and sale of silicone breast implants. Litigation resulted in the negotiation of a plan that devoted up to $3.2 billion to resolving tort claims.
Borden Chemicals and Plastics Operating Limited Partnership — Kramer Levin represented the Official Committee of Unsecured Creditors of Borden Chemicals and Plastics Operating Limited Partnership, which held approximately $325 million of bonds and trade debt.
Big City Radio, Inc. — Kramer Levin represented a group comprised of the holders of in excess of 80% of the public debt of Big City Radio, one of the nation’s largest owner/operators of Hispanic format radio stations. As a result of an orderly, out-of-court liquidation, bondholders were paid in full with interest.
Pinnacle Towers, Inc. — Kramer Levin was heavily involved in the reorganization of Pinnacle Towers, Inc., a Real Estate Investment Trust that owns paging and cellular telephone towers across the United States. In this restructuring, the firm represented the second largest bondholder prior to the chapter 11 case and represented the official creditors’ committee in the case.
Questron Technology, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Questron Technology, Inc., a national distributor of fasteners and a provider of supply chain management solutions and inventory logistics management services.
Big V Supermarkets, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Big V Supermarkets, Inc., the owner and operator of a chain of 35 ShopRite Stores in the New York Hudson Valley and surrounding areas. As counsel to the Committee, the firm was involved in active litigation between the company and the debtors’ principal supplier.
VF Brands, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of VF Brands, Inc., the parent company of Vlasic Foods International, which, among other things, is the manufacturer and distributor of “Swanson” brand frozen foods and “Vlasic” brand pickles.
American Architectural Products Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors of American Architectural Products Corporation and its affiliates, which are engaged in the business of manufacturing and distributing residential and architectural windows and doors. Prior to the filing, the firm served as counsel to an ad hoc committee of note holders.
Paging Networks, Inc. — Kramer Levin initially represented $1.2 billion in bondholders, and then the Official Committee of Unsecured Creditors, in the exchange offer/pre-negotiated bankruptcy of America’s second-largest paging company.
Morris Material Handling — Kramer Levin represented the Official Committee of Unsecured Creditors of Morris Material Handling, which is the largest domestic manufacturer, distributor and service provider of “through the air” material handling cranes and other construction equipment.
SGL Carbon — Kramer Levin represented the Official Committee of Unsecured Creditors in the chapter 11 case of SGL Carbon, one of the world’s largest producers of graphite electrodes, which filed for bankruptcy in response to civil antitrust actions arising out of a worldwide conspiracy to fix prices in the graphite electrode market. In December 1999, the Third Circuit Court of Appeals granted an appeal filed by Kramer Levin and in a precedent-setting decision, ordered the dismissal of the SGL bankruptcy on the ground that the chapter 11 case had been filed in “bad faith.”
DeGeorge Financial Corporation — Kramer Levin represented the Official Committee of Unsecured Creditors in the bankruptcy case of DeGeorge Financial Corporation, a case that involved a nationwide home-building and financing business that filed for bankruptcy protection shortly after its primary lender terminated financing.
London Fog — Kramer Levin represented the Official Committee of Unsecured Creditors of London Fog, which was comprised of holders of approximately $120 million in debt, in the reorganization of one of the leading manufacturers of rain coats and outerwear.
Edison Brothers — Kramer Levin represented the Official Committee of Unsecured Creditors of Edison Brothers, which was comprised of holders of approximately $200 million of public notes and trade debt, in the liquidation of this 1500-store retail chain. After the majority of the debtor’s assets were sold, the committee determined to convert the case to a chapter 7 liquidation. The firm subsequently represented the chapter 7 trustee and helped double the projected recovery to creditors.
Ponderosa Fibres — Kramer Levin represented the holders of in excess of $150 million in tax-exempt bonds in connection with the chapter 11 case of Ponderosa Fibres, the owner of a recycled paper de-inking plant.
SLM International — Kramer Levin represented the Official Committee of Unsecured Creditors in SLM International, a leading manufacturer of hockey equipment and other sporting goods, in the Delaware bankruptcy of the Canadian-based company.
Olympia & York — The Official Committee of Unsecured Creditors of Olympia & York retained Kramer Levin in this complex bankruptcy case concerning the U.S. assets of O&Y. Over the vigorous opposition of O&Y and numerous secured creditor constituencies, the firm formulated a strategy that effectively blocked the debtors’ non-negotiated plan of reorganization and provided the basis for a negotiated plan that significantly enhanced the recovery to unsecured creditors.
Lyondell — Kramer Levin represented certain holders of secured notes issued by affiliates of Lyondell, one of the world’s largest petrochemical companies whose chapter 11 petitions listed nearly $20 billion in debt and in excess of $27 billion in assets. Kramer Levin filed numerous pleadings, including objections to plan classification and motions for payment of administration claims, all directed at achieving a more equitable distribution for its clients as compared to other secured creditor groups. Those papers led to negotiations and plan modifications that significantly enhanced its clients’ recovery under a consensual plan ultimately confirmed.
Evergreen Solar, Inc. — Kramer Levin represented the Official Committee of Unsecured Creditors of Evergreen Solar, a solar panel and related component manufacturer. As Creditors’ Committee counsel, among other things, Kramer Levin was instrumental in facilitating a section 363 sale process, developing litigation theories to maximize unsecured creditor recoveries and negotiating the terms of a resolution of all outstanding litigation between the Debtors, the Committee, and the holders of secured notes. Evergreen’s chapter consensual chapter 11 plan was confirmed in July 2012.
AES Eastern Energy, L.P. – Kramer Levin represented the Official Committee of Unsecured Creditors in the AES Eastern Energy, L.P., et al. bankruptcy cases. Prior to the commencement of their bankruptcy cases in December 2012, AES Eastern owned six coal-fired electric generating plants in New York State and was straddled with over $700 million in debt. Kramer Levin led an investigation of potential fraudulent conveyance claims against the debtors’ parent corporation, AES Corp. related to certain dividends payment made by the debtors to it in the six years prior to the bankruptcy filing. Kramer Levin successfully negotiated a settlement agreement which provided an additional $47 million of cash consideration and a waiver of over $60 million in claims against the bankruptcy estates. Additionally, with the Committee’s active involvement, the Bankruptcy Court approved the sale of AES Eastern’s two operating power plants as well as the sale of its four inactive plants. As a result of these efforts, the debtors confirmed their chapter 11 plan and general unsecured creditors received distributions totaling over 12%. The plan also provided for the creation of a liquidating trust, which is administered by Eugene I. Davis of PIRINATE Consulting. Kramer Levin currently represents the liquidating trust during the post-effective date period.
Catalyst Paper Corporation — Kramer Levin represented a group of bondholders in U.S. matters related to Catalyst’s 2010 out of court restructuring of its unsecured bonds. Catalyst Paper manufactures a range of specialty printing papers as well as newsprint and pulp.
Tronox — On behalf of a group consisting of state environmental authorities and water districts concerned with a contaminated site located in Henderson, Nevada, Kramer Levin opposed Tronox’s initial proposed plan of reorganization. Kramer Levin’s opposition to the plan led to a modified chapter 11 plan that will triple the cash consideration distributed to fund clean up of the site, as well as substantially enhancing the distributions to governmental environmental entities.
Vermillion — Kramer Levin represented the Official Committee of Equity Security Holders of Vermillion Inc. Vermillion, a developer of medical devices and diagnostic tests, filed for bankruptcy protection in 2009 in the Bankruptcy Court for the District of Delaware. After about nine months in bankruptcy, Vermillion was able to confirm a consensual chapter 11 plan which provided its secured and unsecured creditors with payment in full and the reinstatement of company’s equity interests. Kramer Levin, on behalf of the equity committee, was actively involved in the negotiations of Vermillion’s chapter 11 plan and post confirmation management compensation structure.
White Birch Paper Company — Kramer Levin represented a group of secured lenders in its contested bid to purchase the assets of White Birch out of bankruptcy in 2010. White Birch is the second largest newsprint producer in North America, after AbitibiBowater, with mills in Canada and the U.S.
Visteon — Kramer Levin represented Aurelius Capital Master, Ltd., ACP Master, Ltd. and Aurelius Convergence Master, Ltd., holders of common stock of Visteon Corporation in its chapter 11 bankruptcy restructuring.