Business Restructuring and Reorganization

Leaders

Michael A. Rosenthal New York
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Jeffrey C. Krause Los Angeles
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Robert Klyman Los Angeles
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David M. Feldman New York
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Overview

The Business Restructuring and Reorganization Practice Group advises companies in financial distress, their creditors and investors, and parties interested in acquiring assets from companies in distress.  We also guide hedge funds, private equity firms and financial institutions investing in distressed debt and/or equity through the restructuring and bankruptcy process.

Our practice spans a broad spectrum of industries including: 

  • Private equity
  • Energy
  • Shipping
  • Airline
  • Real estate and construction
  • Retail
  • Infrastructure
  • Media and technology
  • Health care
  • Insurance
  • Investment banking
  • Manufacturing

Gibson, Dunn & Crutcher also has one of the premier U.S. bankruptcy litigation practices.  Dubbed the "rescue squad" by The American Lawyer, our litigators are deeply skilled in prosecuting and defending the broad range of disputes that arise during the course of a bankruptcy case.  The Business Restructuring and Reorganization group was named one of Law360's top five Bankruptcy Practice Groups of 2013, and members of the group have been widely recognized by top industry publications, including Chambers and The Guide to the World's Leading Insolvency Lawyers.  We have both prosecuted and defended every type of avoidance action, including fraudulent transfer cases and preference matters, equitable subordination and recharacterization litigation, valuation disputes and contested plan confirmation hearings.

Our group excels in the innovative use of Chapter 11 of the U.S. Bankruptcy Code to implement restructuring of highly complicated, multijurisdictional, non-U.S. companies.  We regularly represent individual creditors, ad hoc committees and official creditors' committees in the largest and most complex out-of-court restructurings and Chapter 11 bankruptcy cases.  

Gibson Dunn's international group is a leader in U.S., European and cross-border insolvencies and workouts.  Innovative and practical, the Business Restructuring and Reorganization group is committed to understanding in detail the business of our clients and crafting solutions, including complex out-of-court workouts and in-court restructurings.  We structure out-of-court transactions to provide protection in the event of a future bankruptcy case.  We are also a leading provider of advice on innovative DIP and exit financing agreements to both debtors and DIP providers. 

The group's global restructuring experience, while focused on building consensus, can be supplemented by Gibson Dunn's extraordinary bankruptcy litigators when a negotiated resolution cannot be reached.  Working with our firm's Mergers and Acquisitions group, we represent both acquirers and companies seeking to be acquired or to spin off assets, both in and out of bankruptcy court.  This makes Gibson Dunn one of the rare global law firms capable of providing the full array of legal services needed by any company debtor, creditor group or investor, in any distressed business situation.  No matter is too large or complex.  

Experience and Recent Representations

  • Arcapita Bank B.S.C.(c) and its affiliates in their Chapter 11 restructuring.  Arcapita is a Bahrain-based investment bank with other offices in London, Singapore and Atlanta, and investments in every region of the globe.  The case, the first-ever restructuring of a Shariah-compliant entity, was named as a finalist for "Middle East/North Africa Restructuring of the Year" by the International Financial Law ReviewThe American Lawyer recognized Gibson Dunn in its 2014 Global Legal Awards as winner of the Global Finance Grand Prize, as well as in the category of Global Finance Deal of the Year: Restructuring and Insolvency (Middle East), for the Arcapita restructuring, and the firm additionally received The M&A Advisor's 2014 Turnaround Award for "Cross-Border Restructuring Deal of the Year (Over $1 Billion)" for the matter. 
  • Almatis B.V. and its affiliates in their Chapter 11 restructuring.  Almatis is a global leader in the development and production of premium specialty alumina materials, with operations in the United States, the Netherlands, Germany, China, India and Japan.  The restructuring was named as a finalist for "European Restructuring of the Year" by the IFLR for its innovative use of Chapter 11 in a cross-border transaction. 
  • Newland International Properties Corp. in its prepackaged Chapter 11 restructuring that was confirmed in just over 30 days.  Newland is the developer and owner of the Trump Ocean Club Hotel and Condominiums in Panama City, a premier luxury property in Latin America.
  • The "PropCo Debtors" (FCP PropCo, LLC, FCP MezzCo Borrowers I – V, LLC) in the Stations Casinos, Inc. Chapter 11 cases filed in Reno, Nevada, which resulted in the restructuring of $5.7 billion in debt.
  • THQ Inc. and its U.S. subsidiaries in their Chapter 11 cases in Delaware.  THQ Inc., a global leader in entertainment computer software, operated development studios in the United States, Canada and China and distributed games worldwide through nondebtor subsidiaries in the UK, France, Germany, Spain, Italy, Japan, Korea and Australia.  The cases involved complex cross-border issues in multiple jurisdictions and complex copyright and patent issues and an auction process that resulted in sales of different components of the business to seven different buyers. 
  • Pacific Monarch Resorts, Inc. (PMR) and its debtor affiliates in a two-year out-of-court restructuring and sale process that ultimately led to Chapter 11 cases to implement the sale of the operating business.  PMR was a developer and seller of time-share properties throughout the Western United States and Mexico.  The Chapter 11 cases resulted in a sale of the time-share business to Diamond Resorts and separate sale of the portfolio of consumer notes and involved cross-border real estate and tax issues arising from PMR's Mexican resort.    
  • Lehman Brothers Finance AG (the Swiss Lehman affiliate) in its Chapter 15 case arising out of the Chapter 11 cases of Lehman Brothers Holdings Inc. and its affiliates, the SIPA proceedings of Lehman Brothers Inc. and the liquidation in Switzerland of Lehman Brothers Finance AG, which, as a wholly owned subsidiary of Lehman Brothers Holdings Inc., engaged in non-U.S. derivative transactions on behalf of the Lehman entities and their customers.   
  • TBS International plc and its affiliates in their prepackaged Chapter 11 restructuring, which was confirmed in fewer than 60 days.  TBS is an ocean transportation service provider serving over 300 industrial shippers in more than 20 countries. 
  • Fleetwood Enterprises, Inc., and 49 affiliates in their Chapter 11 proceedings resulting in the sale of the RV, manufactured homes and military housing manufacturing units as going concerns to separate buyers.  
  • Building Materials Holding Corporation and its affiliates in their successful Chapter 11 cases.  Now known as BMC Select, the company is a leading supplier of building materials and construction services.
  • The Agent (Credit Suisse) and senior secured lenders of Rural Metro Inc., a market-leading private ambulance company operating in 21 states with more than $450 million of senior secured debt and $350 million of unsecured bond debt.  We negotiated a favorable restructuring agreement with the bondholders that served as the basis for a prearranged Chapter 11 filing by Rural Metro in the District of Delaware.  Gibson Dunn also led the negotiation and structuring of the DIP financing that provided Rural Metro with working capital during the Chapter 11 case. 
  • Wilmington Trust as "GUC Trustee" for Motors Liquidation Company, the entity charged with winding down the affairs of Old General Motors and making distributions on account of approximately $30 billion of claims.  In June 2012, the GUC Trustee implemented a novel structure whereby it issued freely transferable GUC Trust Units to holders of allowed claims against Old General Motors that represented the contingent right to receive stock and warrants in New General Motors.  The distribution was the culmination of two years of negotiations with the SEC and other constituencies led by Gibson Dunn pursuant to which the SEC granted unprecedented "no action relief," permitting the Motors Liquidation Company GUC Trust to issue the GUC Trust Units without registration under 12(g) of the Securities Exchange Act. 
  • Claren Road Asset Management, a substantial holder of subordinated debt of Dynegy, Inc.  As counsel to Claren Road Gibson Dunn objected to confirmation of Dynegy's initial Chapter 11 plan, which would have paid dissenting subordinated noteholders nothing, and moved for the appointment of a trustee due to allegations of breach of fiduciary duty of the debtors' management.  After lengthy discovery, litigation and mediation, Gibson Dunn ultimately negotiated a consensual resolution that provided for a substantial distribution to all holders of subordinated debt in excess of 30 percent of their allowed claims, notwithstanding that senior debt was not being paid in full. 
  • Credit Suisse, as agent for the senior secured lenders, to Wastequip, Inc.  Gibson Dunn represented Credit Suisse in connection with the successful out-of-court restructuring of Wastequip, one of North America's largest manufacturers of waste and recycling equipment.  The restructuring resulted in a favorable recovery to Credit Suisse and its senior lender constituency that included a significant cash pay-down and receipt of approximately 90 percent of the new equity issued by reorganized Wastequip. 
  • Law Debenture Trust Company of New York, as indenture trustee for the subordinated notes of Ambac Financial Group.  The Bankruptcy Court for the Southern District of New York entered an order confirming the Fifth Amended Chapter 11 Plan of Ambac Financial Group, a major financial guaranty company with more than $1.5 billion in debt.  The plan contained a negotiated division of estate assets that included a significant recovery (in the form of equity and warrants in reorganized Ambac) for subordinated noteholders. 
  • Anchorage Advisors, Chilton Investment Company, and several other senior unsecured lenders in the cross-border Chapter 11/CCAA restructuring of Trident Resources Corp.  In the restructuring of Trident, one of the leading producers of natural gas in North America, Gibson Dunn's clients converted their debt to equity, backstopped by a rights offering, and took control of the reorganized company.   
  • Davidson Kempner and Silverpoint as prepetition term loan lenders and postpetition lenders to Dayton Superior Corporation, the leading North American provider of nonresidential concrete construction accessories, chemicals and forming products, in connection with Dayton's successful bankruptcy reorganization. 
  • MHR Fund Management, UBS, Luxor Capital Partners and Whitebox Advisors, as the senior lenders of Comanche Clean Energy.  Gibson Dunn represented these lenders in the successful out-of-court restructuring of Comanche, an entity owned through a Cayman Islands holding company, which operates an ethanol plant in Brazil.    
  • Scoggin Capital Management, GE Capital Corporation and Credit Suisse.  Gibson Dunn represented these members of a steering group of first-lien lenders in connection with the successful prepackaged bankruptcy of True Temper Sports, the No. 1 golf club shaft manufacturer. 
  • Q Investments in the successful out-of-court restructuring of $715 million of PIK debt of Travelport Holdings, one of the world's largest global distribution systems and airline IT providers.
  • Obtained a major victory on behalf of Wilmington Trust Company (WTC) in Southern District of New York bankruptcy proceedings concerning 2014 vehicle recalls by General Motors LLC (New GM).  WTC is the trustee for the general unsecured creditors trust (GUC Trust) created in the wake of the 2009 bankruptcy of General Motors Corp. (Old GM); after its rescue from insolvency it became New GM.  In the wake of the 2014 recalls that would ultimately cover 27 million vehicles, plaintiffs filed state and federal class actions against New GM around the United States estimated to collectively seek damages of between $7 and $10 billion.  New GM sought to enjoin the suits under the order entered in connection with its July 2009 asset purchase, which barred all lawsuits against New GM concerning pre-sale claims with limited exceptions.  The court held that plaintiffs could not seek damages from the GUC Trust, but that New GM could be sued for its own conduct in failing to disclose defects in and timely recall of vehicles distributed or manufactured before the 2009 sale.  
  • Won a unanimous affirmance by the Second Circuit of dismissals of all common-law tort claims brought against UBS by Irving Picard, Trustee for the liquidation of Bernard L. Madoff Investment Securities, LLC (BLMIS) based on UBS's role as a service provider for international "feeder funds" that invested in BLMIS.  The district court had dismissed all common-law tort claims, including aiding and abetting fraud, aiding and abetting breach of fiduciary duty, conversion, unjust enrichment and contribution, holding that the Trustee lacked standing.  In affirming the district court, the Second Circuit held that the doctrine of in pari delicto precluded the Trustee from suing on behalf of the BLMIS estate, and the Trustee lacked standing to sue on behalf of BLMIS customers. 
  • Resolved groundbreaking, multibillion-dollar litigation by NML Capital, Ltd. (an affiliate of Elliott Management Corporation) against the Republic of Argentina when Argentina paid NML more than $2.4 billion to satisfy NML's claims on the country's defaulted bonds.  This settlement marked the conclusion of what the Financial Times called the "sovereign debt trial of the century" and ended 13 years of litigation following Argentina's default in 2001 on more than $80 billion in external debt.  While most of Argentina's creditors accepted new bonds, worth much less, in exchange for the repudiated bond obligations, NML chose to fight.  After securing judgments, attachments and injunctions against Argentina, the tide turned with two decisive U.S. Supreme Court victories won for NML by Gibson Dunn.  Still unwilling to comply, Argentina continued to resist – and suffer the consequences – until the Republic's new president initiated negotiations with creditors and the settlement agreement was reached.
  • Secured a settlement for Lehman Brothers Finance AG that resulted in the return of nearly $90 million to Lehman Brothers Finance, in connection with claims brought by Millennium International relating to a call option transaction involving more than $100 million in shares that was in the process of being unwound at the time of Lehman's collapse. 
  • Secured a favorable, unanimous jury verdict in the District of Nevada on behalf of Rio Properties, LLC (known as the "Rio All-Suites Hotel and Casino"), a subsidiary of Caesars Entertainment, with respect to 60 of 66 alleged fraudulent transfers totaling millions of dollars, or 91 percent of the transfers at issue.  Gibson Dunn successfully withdrew the reference from the Bankruptcy Court for the Central District of California and transferred the case to the district court.  After a two-week trial, the jury found that Rio had acted in good faith in accepting cashier's checks from a known customer and permitting him to gamble.  The customer later pled guilty to mail fraud in connection with transactions involving National Consumer Mortgage, the company from which he obtained the funds to purchase the cashier's checks.    
  • Canyon Capital Advisors, Farallon Capital Management, Luxor Capital Partners and Whitebox Advisors, as lenders to General Growth Properties, Inc., ("GGP"), one of the largest shopping mall owners/operators in the United States, in a contested auction process to provide a $400 million DIP financing facility that was convertible to post-reorganization common stock of GGP. 
  • Farallon Capital Management as a major prepetition secured lender of LyondellBasell Industries, one of the world's largest plastics, chemical and refining companies, in connection with Farallon's participation in Lyondell's $8 billion DIP financing.  This unique and notable financing authorized a significant non-pro rata roll-up of the prepetition debt. 
  • A "New Money" lender in connection with a $400 million DIP financing of Chemtura. 
  • Two prepetition lenders in their participation in Smurfit-Stone's $750 million DIP financing. 
  • Argonaut Ventures, the largest shareholder and prepetition creditor (with investments in excess of $1 billion) of solar company Solyndra, LLC in connection with Solyndra's high-profile Chapter 11 case in the District of Delaware.  Argonaut provided Solyndra's DIP financing and was also the principal sponsor of Solyndra's confirmed Chapter 11 plans.  Once the darling of Wall Street, Solyndra received extensive press coverage as a result of federal government loans to the failed solar company exceeding $500 million.
  • Whippoorwill Associates, Inc. as prepetition bondholder, DIP financing lender, and backstop rights offering party in connection with the Chapter 11 restructuring of Loehmann's Discount Department Stores, a national U.S. retail chain.
  • Garrison Investment Group and its affiliates in the restructuring of its investment in Church Street Health Management, Inc.  Garrison acted as the lead DIP lender, stalking horse bidder, and purchaser implemented through a sale under Section 363 of the Bankruptcy Code pursuant to which Garrison credit bid its DIP and prepetition secured debt. 
  • Paulson & Co. in the bankruptcy case of Extended Stay Hotels in which Paulson, together with Centerbridge and Blackstone, acquired the Extended Stay Hotels as the owner and operator of nearly 700 hotel properties across the United States. 
  • Luxor Capital Partners as the majority bondholder and rights-offering backstop party, in the acquisition of William Lyon Homes, a leading homebuilder in California, Nevada and Arizona, implemented through a prepackaged Chapter 11 case filed in the District of Delaware. 
  • Microsoft in connection with the $4.5 billion sale of Nortel's patent portfolio. 
  • A joint venture of the Gores Group and Siemens in connection with the $900 million auction of Nortel's Enterprise Solutions business. 
  • SK Telecom in connection with the $321 million sale of substantially all of the assets of Blockbuster Inc. under Section 363 of the Bankruptcy Code.  
  • Castleton Commodities (fka Louis Dreyfus Highbridge Energy) in its acquisition of the Roseton power generation facility from Dynegy, Inc. as part of Dynegy's bankruptcy case. 
  • Chinese manufacturer Hangyang LLC in its cross-border acquisition of U.S. consumer products company PowerBalance LLC through a Section 363 sale.     
  • Chinese audio component manufacturer GGEC America Inc. in the cross-border acquisition of U.S. audio equipment manufacturer AuraSound Inc. through a Section 363 sale.   
  • Taylor Fresh Foods, North America's leading producer of salads, fresh-cut vegetables and healthy fresh foods, in its acquisition of substantially all the assets of Gourmet Kitchens, Inc., headquartered in Chicago, through a Section 363 sale.  
  • Advised Heart of La Défense Sarl ('Hold')/Dame S.à r.l as the owners of Coeur Défense, the largest single office complex in Europe, including its acquisition of the complex in 2007, its subsequent landmark restructuring and most recently, its sale.  Our restructuring work helped the French CMBS debtor and its offshore SPV to obtain French court protection (in a procedure resembling the U.S. Chapter 11 proceedings) while working through the restructuring.  The numerous court decisions obtained by our restructuring team were described by French publications as being "at the heart of the legal news, at the heart of the business world, of the complexities of the financial world and of the crisis which affects the world economy" and "having more decorations than a general of the red army."
  • Assisted Verbund's French subsidiary, Poweo Pont-sur-Sambre (PSS) in connection with the opening of a safeguard procedure, leading to the termination of a Long Term Gas Supply Agreement (running until 2023) linking PSS's Combined Cycle Gas Turbine to Italian energy giant ENI.  Our restructuring team then advised with regards to the long-term future of the assets and the analysis of the available options ultimately leading to a sale to KKR.  The use of the safeguard procedure was instrumental in creating options for the monetization of Verbund's assets in France.
  • Represented hedge funds in court proceedings in London and Paris in the restructuring of £6 billion debt of the Eurotunnel Group of companies.  We were instrumental in obtaining a landmark French Supreme Court ruling, praised as a "welcome and long awaited decision," that reversed long-established case law on the creditor's lack of standing to challenge the opening of a bankruptcy proceeding in France.
  • Represented the noteholders (comprising Apollo Management, UBS, Merrill Lynch International, GLG Partners and Jabre Capital) in relation to the restructuring of, and enforcement action relating to, $100 million Guaranteed Senior Notes issued by Mobile-8 Telecom Finance Company B.V. and guaranteed by PT Mobile-8 Telekom Tbk, an Indonesian cellular phone operator.
  • Represented Escotel (an Indian telecommunications company) in the restructuring of rupee and US$175 million financing provided by Chase and a syndicate of commercial banks and ICICI, with export credit provided by US-Exim, Hermes and Eksportfinans (the Norwegian export credit agency).
  • Represented Gate Gourmet in a CHF850 million credit agreement with Goldman Sachs Credit Partners L.P., Calyon, Credit Suisse and Deutsche Bank and subsequent debt and security restructurings in Singapore, Thailand and India.
  • Represented Lehman Brothers in the approximately $300 million restructuring and debenture refinancing of Grande Asset Development Public Company Limited for the development of a portfolio of hotel, residential and retail assets in Thailand comprising the Regent Hotel in Bangkok, the Regent Residences in Bangkok, the Sails Condominium in Pattaya, the Westin Grande Sukhumvit in Bangkok, the Sheraton Hua Hin, the Crowne Plaza Sukhumvit in Bangkok and the Le Meridien Pattaya Resort. ​