Bankruptcy and Corporate Restructuring

The Scope of the Anti-Deprivation Rule

Mon, 1 Aug 2011 11:07:08 -0400

On 27 July 2011, The Supreme Court of England and Wales handed down its long awaited judgment concerning the scope and application of the "anti-deprivation" rule. This appeal, arising from the decision in Perpetual Trustee Company Ltd v BNY Corporate Trustee Services Ltd & Ors (the "Perpetual Case"), was dismissed. The court found that the rule should be applied with common sense and would not always apply to bona fide commercial transactions.

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Winning - Successful Litigators, Powerful Strategies

Robert J. Stark (rstark@brownrudnick.com) — Fri, 8 Jul 2011 13:50:22 -0400

Robert J. Stark, partner in Brown Rudnick's New York office, was one of 14 lawyers featured in The National Law Journal's Special Report (June 13, 2011). Readers from across the country were asked to nominate trial attorneys with at least one significant win at jury or bench trial within the past 18 months and who have a track record of success over many years.

This article discusses Robert's approach to a formidable challenge -- representing the unsecured creditors in Visteon's Chapter 11 filing. Against warnings that "there's not going to be a success for you at the end of the day," he clearly beat these odds. Robert managed to win nearly $2 billion for his clients by pursuing his "value-finding courtroom strategy." To learn more about this case, please read the article Winning - Successful Litigators, Powerful Strategies on our website.

Brown Rudnick's Gordon Z. Novod Recognized as One of Law360’s "Rising Stars" in Bankruptcy

Gordon Z. Novod (gnovod@brownrudnick.com) — Thu, 7 Apr 2011 14:57:34 -0400

We are pleased to share with you the news that Gordon Z. Novod, a partner in Brown Rudnick's New York office, was selected by the editors of Law360 as a "Rising Star" in bankruptcy and corporate restructuring. He was one of only five bankruptcy attorneys in the country named to Law360's list of lawyers under 40 to watch.

If you'd like to learn more, please read the article titled Rising Star: Brown Rudnick's Gordon Novod on our website.

Recent Seventh Circuit Decision Provides Clarity on the Assignability of Cure Rights in Bankruptcy Claims Transactions

Mon, 21 Mar 2011 13:53:16 -0400

Recently, the U.S. Court of Appeals for the Seventh Circuit issued an opinion that is noteworthy to participants in the claims trading market. In ReGen Capital I, Inc. v. UAL Corporation (In re UAL Corporation), 2011 WL 559702 (7th Cir. Feb. 18, 2011), the Seventh Circuit held that cure rights associated with an assumed contract are included in the bundle of rights "arising out of or in connection" with a claim against a debtor, and can thus be assigned to a third-party purchaser of such a claim.

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BNY Corporate Trustee Services Limited v Eurosail-UK 2007-3BL PLC & Ors.

Mon, 21 Mar 2011 11:14:41 -0400

On 7 March 2011 the Court of Appeal in Eurosail handed down a significant decision on the meaning of the 'balance sheet insolvency' test set out in section 123(2) of the Insolvency Act 1986. This was the first substantive decision on this issue by an appellate court.

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Bankruptcy Group of the Year: Brown Rudnick

Thu, 27 Jan 2011 15:49:57 -0500

Brown Rudnick was one of only five US law firms to be selected as "Bankruptcy Group of the Year" by the editors of Law360. We were specifically recognized for our leading role in Quigley, Lyondell, Visteon, Six Flags and American Safety Razor, among others. This award honors our Bankruptcy & Corporate Restructuring Group as one that "consistently gets results" for our clients in high stakes, tough cases.

To read the complete article, please click here.

How distressed claims trading may impact your reorganization strategy

Edward S. Weisfelner (eweisfelner@brownrudnick.com) — Thu, 11 Nov 2010 14:27:26 -0500

The surging growth of the claims trading market, and the increasing influence exercised by hedge funds and private equity funds that purchase claims and interests, has revolutionized corporate restructurings. Learn more about this trend from Edward S. Weisfelner, Chair of Brown Rudnick's Bankruptcy and Corporate Restructuring Practice Group, in the book Navigating Today's Environment: The Directors' and Officers' Guide to Restructuring.

Feel free to read the chapter titled How distressed claims trading may impact your reorganization strategy on our website.

Selling Derivative Claims

Mon, 30 Aug 2010 11:37:56 -0400

The financial crisis has resulted in the termination of billions of dollars worth of derivatives between sophisticated market participants. When a defaulting party files for bankruptcy, the non-defaulting party is often left with a claim against the estate of its counterparty--and claims holders may seek to monetize them by selling to third parties.

Steven B. Levine, Finance Practice Group Leader at Brown Rudnick, and Timothy C. Bennett, Associate at Brown Rudnick, run through the considerations potential sellers should have in mind when negotiating and documenting a claim sale.

To learn more, please read the article Selling Derivative Claims in Derivatives Week on our website.

Frederick's Sees Attraction of Liquidation Firms' Lending Arms

Steven B. Levine (slevine@brownrudnick.com) — Thu, 26 Aug 2010 11:36:04 -0400

Today it is common for liquidation firms to appear among the names of a company's lenders as an alternative source to a bank. For example, earlier this month, Frederick's of Hollywood Group Inc. closed a $7 million loan with a lender affiliated with a liquidation firm as part of its recapitalization and strategic turnaround.

In this article, Steven B. Levine, Brown Rudnick’s Finance Practice Group Leader, offers insight on the attraction of liquidation firms.

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LBIE - Recent Court of Appeal Judgment in Relation to the Client Monies Issue

Tue, 17 Aug 2010 11:03:01 -0400

Below is a summary of the Court of Appeal’s judgment of 2 August 2010 in relation to the ownership of client funds held by LBIE at the date of administration (the so-called "client monies" issue). Those funds were subject to a statutory trust imposed by Chapter 7 of the Client Asset Sourcebook, known as "CASS7" (the FSA’s client money rules).

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U.S. Bankruptcy Court Grants Chapter 15 Foreign Main Recognition to Fairfield Funds

Tue, 3 Aug 2010 10:42:12 -0400

On July 22, 2010, the U.S. Bankruptcy Court for the Southern District of New York (Lifland, J.) entered an order recognizing the insolvency proceedings pending in the British Virgin Islands in respect of three BVI-registered hedge funds - Fairfield Sentry Limited and two other related funds - as foreign main proceedings under Chapter 15 of the Bankruptcy Code. The Fairfield funds were the largest of the so-called Bernard Madoff "feeder funds," and, up until the disclosure of the Madoff fraud in December 2008, certain of their activities could be said to have taken place in New York City. Brown Rudnick LLP represented the BVI court-appointed liquidators for the Fairfield funds in their efforts to obtain Chapter 15 recognition of the BVI proceedings in U.S. Bankruptcy Court.

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Lehman Brothers Fallout

Tue, 29 Jun 2010 16:31:35 -0400

Louise Verrill and Sonya Van de Graaff overview some of the imaginative uses of current insolvency and company legislation since the insolvency of Lehman Brothers.

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Brown Rudnick's European Litigation Bulletin - June 2010

Tue, 29 Jun 2010 16:23:42 -0400

Welcome to the summer edition of Brown Rudnick's European Litigation Bulletin. This electronic newsletter highlights the latest regulatory news and case information related to commercial litigation and anti-corruption.

Please click here to read the current issue.

Federal Appellate Court Affirms Debtors' Ability to Bar their Senior Lenders from using Debt Owed to them to try to Purchase the Bankrupt Companies' Assets at Auction

Wed, 7 Apr 2010 15:44:15 -0400

The United States Court of Appeals for the Third Circuit very recently upheld the ability of Chapter 11 debtors Philadelphia Newspapers, LLC and its bankrupt affiliates to preclude senior lenders from "credit bidding" their debt at the public auction of the debtors’ assets.

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Brown Rudnick's European Insolvency and Litigation Bulletin - February 2010

Tue, 2 Mar 2010 15:05:52 -0500

Welcome to Brown Rudnick's European Insolvency and Litigation Bulletin. This electronic newsletter highlights the latest regulatory news and case information related to the bankruptcy, corporate restructuring, finance, anti-corruption, and commercial litigation sectors.

The February 2010 issue compares the different treatment given by courts to cash flow waterfalls in enforcement scenarios.

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Investor Directors of Distressed Companies: How Should They Act?

(James Shaw) jshaw@brownrudnick.com & (Louise Verrill) lverrill@brownrudnick.com — Tue, 14 Apr 2009 13:23:37 -0400

For most private equity and venture capital firms, it is an established industry practice to appoint their partner(s) to act as investor director(s) in their portfolio companies with a view to gaining more active supervision and management of the company. Few, if any, questions have been asked, and scant concerns have been raised about this standard practice during the recent golden era of finance. After all, most companies performed well, and in good times there is rare occasion to question the performance and prudence of the directors. However, the current financial turmoil is casting doubt on this standard practice. Irrespective of how or why a director holds office, he or she still has certain duties and responsibilities.

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Brown Rudnick Is Recognized by Latin Lawyer Magazine As Counsel in Restructuring "Deal of the Year"

Tue, 14 Apr 2009 13:07:01 -0400

On March 5, 2009, the publishers of Latin Lawyer recognized the international law firm of Brown Rudnick for its role as legal counsel to the Ad Hoc Committee of Bondholders of the Cerro Negro heavy oil project in Venezuela, owned in a joint venture by subsidiaries of ExxonMobil, BP, and Petróleos de Venezuela, S.A. (PDVSA).

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The Cross-Jurisdictional Perfection of Security

acatoir@brownrudnick.com (Anne-France Catoir) — Tue, 7 Apr 2009 15:01:44 -0400

International insolvency measures have never had greater practical importance than in this market. The main principle governing insolvency proceedings internationally is the equality of creditors in the distribution of the assets. This is usually subject to the priority afforded by a security interest in the assets. Therefore it is key that a secured creditor is confident that his security is enforceable.

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A Liquidating Trustee’s Principal Tools for Resolving Tax Issues in Bankruptcies

Tue, 7 Apr 2009 15:00:02 -0400

As part of making distributions to allowed claimants of a bankrupt entity, a liquidating trustee must decide the best way to handle potential outstanding tax liabilities.

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