Bankruptcy, Insolvency & Creditors' Rights

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Overview

Dykema’s Bankruptcy, Insolvency and Creditors’ Rights practice is committed to delivering timely, creative, practical and cost-effective solutions to the challenges that face creditors and financially distressed companies. Nationally ranked as a “Best Law Firm for Banking and Creditor/Debtor Rights/Insolvency and Reorganization” by U.S. News, our team of bankruptcy attorneys, transactional lawyers and litigators is distinguished by its extensive experience in this quickly evolving area.

We represent money center and regional banks, in addition to clients from numerous industries, including automotive, general manufacturing, retail, hospitality, construction and health care. Drawing on resources from across the Firm, we have advised lenders, middle-market businesses, insurance companies, municipalities, landlords, and creditors’ committees on the full spectrum of insolvency-related matters, including restructurings of existing credit facilities, in-and out-of-court workouts, Chapter 11 reorganizations and Chapter 7 liquidations.

Areas of specialization include:

Asset Purchases

In business, one company’s crisis is inevitably another company's opportunity. Dykema’s team of bankruptcy practitioners, mergers and acquisitions attorneys and litigators is adept at identifying both the challenges and the opportunities inherent in situations involving financially distressed companies.

We counsel purchasers attempting to acquire assets from troubled companies, whether through sales by secured creditors under Article 9 of the Uniform Commercial Code (UCC), sales by receivers and assignees for the benefit of creditors, or sales by bankruptcy trustees and debtors-in-possession under Section 363 of the bankruptcy code.

Bankruptcy and Insolvency Litigation

The highly charged and fast-paced nature of bankruptcy litigation requires a combination of strategic insight and comprehensive experience in order to prevail. At Dykema, we have established ourselves as one of the nation’s strongest trial and litigation firms. When combined with our specialized knowledge of the Bankruptcy Code, our litigation experience has helped our firm obtain favorable resolutions—in a host of forums—for all types of insolvency-related litigation, arbitration and dispute resolution.

Our bankruptcy litigators provide exceptional service to companies involved in the full spectrum of insolvency-related disputes. This includes representation of lenders foreclosing on all types of properties, such as farms, commercial, retail and office properties, apartment buildings, partially completed residential developments and industrial, specialty and mixed-use properties. In addition, we vigorously represent defendants in lawsuits to avoid and recover preferences and fraudulent transfers, and whose claims in bankruptcy are contested. Our litigators also represent receivers in cutting-edge matters involving their right to seize rents and other assets held by owners and/or borrowers.

Since the result of a bankruptcy dispute dramatically impacts the future of the parties involved, our goal is to help clients resolve business disputes—in- and out-of-court—as quickly and cost-effectively as possible.

Creditors’ Committees and Trustee Representation

Given the fiduciary duties imposed on creditors’ committees and bankruptcy trustees, it is more important than ever to engage counsel with the experience, knowledge and insight to ensure that those duties are fulfilled.

Dykema’s Creditors’ Committees and Trustee practice is dedicated to maximizing return for clients in distressed situations. Moreover, the broad and diverse experience of our lawyers helps us manage the often conflicting interests of creditors’ committees and their constituents. With these tools in hand, we have successfully formulated and implemented strategies on behalf of trustees and creditors’ committees in respect to:

• Investigating of the activities of debtor's officers, directors and shareholders
• Commencing litigation that will enhance recovery to unsecured creditors
• Analyzing and objecting to claims
• Structuring and documenting reorganization plans
• Case administration

Representation of Financial Institutions

At Dykema, we bring decades of experience to our representation of financial institutions in a wide range of bankruptcy and insolvency issues. Our lawyers apply an interdisciplinary approach to craft solutions for commercial banks and other financial entities facing the challenges of insolvency-related matters.

We represent commercial banks, real estate investment trusts and other lenders that have made secured and unsecured loans to businesses that have encountered subsequent economic hardship.

Financial institutions benefit from our counsel and from the range of services we can deploy to reach successful resolutions of their insolvency-related issues. Our work in this area includes:

• Negotiating out-of-court workouts and forbearance agreements
• Restructuring loans
• Financing Chapter 11 debtors through debtor-in-possession financing and cash collateral orders
• Negotiating adequate protection for use, or prohibiting use, of a creditor’s collateral by a bankrupt company
• Recovering possession of a client’s property from borrowers both in and outside of bankruptcy cases
• Proposing and confirming plans of reorganization or liquidation on behalf of creditors in cases under Chapter 11 of the Bankruptcy Code
• Foreclosure sales under Article 9 of the Uniform Commercial Code (UCC)
• Assignments for the benefit of creditors

In-and Out-of-Court Restructurings and Liquidations

When it comes to restructurings and liquidations, one size never fits all. Our team provides targeted, customized solutions for clients confronting the challenges of distressed asset or non-performing loan situations. Our team of bankruptcy practitioners leverages decades of experience in debtor-creditor laws, in- and out-of-court restructurings, workouts and liquidations to identify winning options and develop strategies for a broad base of financial institution, real estate, manufacturing and middle-market business clients. We represent these clients in every aspect of restructuring and reorganization so that they may both maximize their recovery in troubled credit situations and minimize their risk and expense. We also have experience in liquidating a wide variety of assets, from airplanes and racetracks to perfume factories and shipping vessels.

We represent creditors successfully in all types of restructurings and reorganizations, including Chapter 11 reorganizations, out-of-court restructurings, recovery of pledged collateral, realizing upon liens, and security interests and defense against claims that have been asserted, and prosecution of claims against debtors.

For financially distressed businesses, we provide focused guidance and representation to clients in Chapter 11 and Chapter 7 proceedings, as well as in- and out-of-court restructuring, sales under Article 9 of the Uniform Commercial Code (UCC), and assignments for the benefit of creditors. We have a substantial record of success in resolutions based on strategies such as working with secured and unsecured creditors; settling guaranteed obligations; collecting assets; liquidating claims; out-of-court composition; receiverships; assignments for the benefit of creditors, asset sales and out-of-court workouts to avoid bankruptcy proceedings.

Landlord Representation

The economic climate of recent years has created new challenges for landlords and property owners. Drawing from our experience providing cost-effective strategies that are innovative, realistic and value-driven, Dykema has established a successful history advising owners of real estate who face challenges associated with their financially distressed tenants. In these matters, our goal is to ultimately limit client risk and liability while making the most of client assets.

We have experience with the full array of real estate assets. We represent landlords and owners of office buildings, malls and retail centers, industrial properties and multifamily housing projects.

Representative areas of practice include:

• Forbearance agreements
• Property management issues, including distressed property and “turnaround” situations
• Reorganization under Chapter 11 of the Bankruptcy Code
• Assumption and assignment of tenant leases
• Enforcing claims for lease rejection damages against bankrupt tenants

Representation of Distressed Businesses

Creative, value-driven counsel is critical to businesses enmeshed in bankruptcy and insolvency-related matters. Dykema lawyers approach the Firm’s representation of distressed businesses armed with a thorough grounding in the intricacies of bankruptcy and debtor-creditor laws. We use forward-thinking, yet practical strategies to find viable, risk-reducing solutions for our clients.

Importantly, clients benefit from the perspective gained from our regular representation of lenders and other creditors. For businesses encountering financial hardships, we use this complementary experience to ensure that we approach every matter with a deep understanding of both sides of the issues.

We bring decades of experience in all aspects of law surrounding financially troubled companies. Our lawyers are trusted advisors to clients from the automotive, general manufacturing, commercial real estate, retail, hospitality and health care industries.

Dykema’s bankruptcy and insolvency team is experienced with the full range of insolvency-related matters, including:

• Preparing and filing for Chapter 11 relief
• Complex automotive-related workouts, both in- and out-of-bankruptcy
• Multimillion dollar corporate restructuring transactions
• Litigation prior to or during bankruptcy proceedings
• Liquidation of assets
• Real estate loan restructurings and foreclosures
• Issues related to supply chain management

Experience Matters

Representative bankruptcy matters include:

• Serving as lead counsel to one of the largest U.S. airports in more than 25 bankruptcies, working in conjunction with the United States Department of Transportation on Passenger Facility Charge litigation on behalf of various airports in airline bankruptcy cases nationwide
• Representing a North Texas municipality in Chapter 9
• Representing a major land developer in the municipal bankruptcy of City of Westlake, Texas, in litigation arising from de-annexation of land
• Serving as lead bankruptcy counsel on ad valorem personal property tax issues arising from taxation of transient property, such as airplanes and truck fleets
• Serving as lead bankruptcy counsel in cases relating to assertion of claims over failed special revenue bonds issued by various municipalities
• Serving as lead bankruptcy counsel in environmental cases including large environmental trusts
• Representing a health care REIT in the national Chapter 11 cases of nursing home chains that were lessees of the REIT-owned facilities or borrowers from the REIT
• Working closely with the State of Michigan during the restructuring phase of a publicly traded health care provider
• Representing, as sole lead financing counsel, a global performance material and specialty chemical manufacturer in its $2.05 billion Chapter 11 exit financing facility from the commitment letter stage through closing
• Representing a public healthcare company in an out-of-court restructuring
• Representing a global leading apparel manufacturer in structuring, negotiation, documentation and closing of a first-lien credit facility, second-lien credit facility and bridge loan facility aggregating approximately $3.1 billion
• Representing, as the sole debt counsel, an automotive supplier in the structuring, negotiation, documentation and closing its $725 million debtor-in-possession financing. The transaction included simultaneous negotiations with the supplier’s customers, which included most of the world’s major automotive companies and related interested parties
• Serving as co-counsel in the successful Chapter 11 reorganization of a major cargo and charter passenger airline
• Serving as lead counsel in the successful Chapter 11 reorganizations of:
• The second largest vinyl and aluminum window manufacturer in the United States requiring negotiation with unions, landlords and secured lender groups
• Electrical Cooperatives
• A VOIP telecommunications company
• Defense companies
• Community hospitals
• Oil and Gas companies
• Commercial and residential real estate developers
• Multi-state retailers
• Multi-state restaurant chains
• Suppliers
• Hospitality companies including hotels
• Serving as unsecured creditor committee counsel in successful Chapter 11 reorganization of:
• A major league baseball team
• The second largest electric generator in the United States

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