We view litigation as an adjunct to our restructuring practice. When, despite our best efforts, litigation becomes unavoidable, Ropes & Gray has significant experience regarding all forms of contentious insolvency litigation, including defense of leveraged buyout transactions, stock redemption, dividend recapitalization litigation, debt recharacterization, contractual and equitable subordination, and guarantor and lease liability. As part of these claims, we have successfully brought and defended suits against officers, directors and related third parties.
Among Ropes & Gray’s most recent and notable representations of parties involved in insolvency litigation are the following:
- Energy Future Intermediate Holding Company LLC and EFIH Finance Inc., and debtor affiliates in a chapter 11 case that is among the largest ever filed in the district of Delaware and is one of the largest chapter 11 cases filed in history (based on liabilities). EFIH has more than $7.6 billion in secured and unsecured notes outstanding. The restructuring involves complex legal issues relating to, among other things, the entitlement of first lien noteholders to a make-whole premium, intercreditor entitlements, tax-sharing arrangements and other tax matters. Since the bankruptcy filing, Ropes & Gray has engaged in novel litigation culminating in two successful trials regarding transaction structures originally proposed by the company.
- Wilmington Trust as indenture trustee for $250 million of 1.5 lien notes issued by Momentive Performance Materials Inc., in the chapter 11 cases of MPM and its debtor affiliates, including appeals relating thereto. MPM is a multi-billion dollar quartz and silicone manufacturer owned by Apollo Global Management with numerous international production facilities and other assets. The restructuring involved complex legal issues relating to, among other things, entitlement of first lien and 1.5 lien noteholders to a make-whole premium upon repayment of the notes under the plan of reorganization, intercreditor entitlements, and the appropriate chapter 11 cramdown rate of interest. Since the filing in April 2014, Ropes & Gray has engaged in litigation concerning the make-whole premium, including seeking to lift the automatic stay to permit holders to rescind acceleration of the notes. Ropes & Gray has also opposed imposition of a “Till formula” cramdown rate of interest on notes issued to the holders under the confirmed plan of reorganization instead of employing a market rate. Ropes & Gray is currently engaged in appellate litigation with respect to these very important and complex issues before the United States Court of Appeals for the Second Circuit.
- In excess of 25 creditors in the case of In re Lehman Brothers Holdings, Inc., a Chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of New York, in connection with disputes and claims involving various Lehman entities located in the United States and elsewhere. The firm represents investment funds and financial institutions in the acquisition of billions of dollars of diverse claims in Lehman’s proceedings worldwide – derivative claims, guarantee claims, litigation claims, general unsecured claims, customer property claims, bonds and structured security claims, net equity claims, and other claim types. These transactions are the most complex claims acquisitions in the marketplace.
- Holders of $740 million of second-lien debt of CalGen Corporation, in the case of In re Calpine Corporation, a Chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of New York, one of the Calpine debtors, in involving claims for "make-whole" damages and breach of "no-call" provisions of the debt, as well as related claims, and negotiated a highly favorable resolution of the claims following rulings in the Bankruptcy Court.
- The Official Committee of Unsecured Creditors of In re Charter Communications, Inc., a Chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of New York, in litigation over confirmation of the plan of reorganization and reinstatement of $10.8 billion of senior debt, including a 19-day trial of the issues.
- Numerous clients, including class representatives, in $9 billion fraudulent conveyance litigation in the case of In re Tribune Companies, a Chapter 11 proceeding before the United States Bankruptcy Court for the District of Delaware.
- Harvard, Yale, University of Michigan, and Washington University of St. Louis, in the case of In re Ginn-La St. Lucie, a Chapter 11 proceeding before the United States Bankruptcy Court for the Southern District of Florida, as major limited partners being sued in a $150 million fraudulent conveyance litigation arising from a dividend recapitalizations transaction.
- Some of the principal holders of senior loans to Champion, in the case of In re Champion Enterprises, a Chapter 11 proceeding before the United States Bankruptcy Court for the District of Delaware, in defense of a litigation brought by the Creditors' Committee seeking to equitably subordinate the loans, asserting claims of preferences and fraudulent conveyances, and asserting other claims against a group of approximately 120 lenders; successfully won dismissal on a motion to dismiss all claims against our clients along with dismissal of the claims against other lenders.
- Deutsche Bank Trust Company Americas, as administrative agent, in a $12 billion fraudulent conveyance litigation, in the case of In re Lyondell Chemical Company, a Chapter 11 proceeding before the United States Bankruptcy Court for the Southern District of New York.
- The representatives of the beneficiaries of the estate of Howard Hughes under a Contingent Stock Agreement in the Chapter 11 case of In re General Growth Properties, Inc., a Chapter 11 proceeding before the United States Bankruptcy Court for the Southern District of New York, in contentious litigation on valuation of a master planned community outside of Las Vegas and on plan confirmation issues.
- The German Administrator of Telegenicom, in significant U.S. bankruptcy litigation between competing insolvency proceedings of German manufacturing subsidiaries and separate U.S. Chapter 11 proceedings for U.S. subsidiaries, where the United States attempted to assert control of German assets.