Cadwalader's municipal practice is nationally recognized for its creativity, technical expertise, and sophisticated market knowledge.  We have been involved in countless complex and challenging situations involving state and local governments and non-profit tax-exempt borrowers.  In combination with the resources of Cadwalader's global practice, we offer our clients multi-disciplinary expertise in municipal finance, financial restructuring, bankruptcy, litigation, market regulation, insurance regulation, pension plan regulation, and tax structuring.

Many of our attorneys are recognized as pre-eminent in their field, are well-known to courts and global financial institutions and have achieved favorable results in many complex and significant reorganizations.  Our municipal finance attorneys have been involved in financings in over 50 jurisdictions and in a wide range of capital structures and credits, including healthcare, housing, gas prepay, higher education, public school districts, military housing, airports, toll roads, sports facilities, cultural facilities, infrastructure, property insurance, tobacco settlement, industrial development, public power, public pension plan investing, general obligation debt, lease financings, special assessment, and sales tax revenues. 

Out-of-Court Restructurings.   Every out-of-court restructuring presents its own challenges.  Attorneys in Cadwalader's Distressed Municipal Finance Group have the seasoned judgment and creativity to deal with the unpredictability that colors the dynamics of a municipal entity in financial distress.  We have experience in addressing labor, tax, environmental and operational issues for several of our distressed clients and have been involved in numerous out-of-court restructurings over the years, helping to steer large, divergent groups of creditors and other stakeholders through what is often uncharted waters.

Rescue Financings.  A municipal entity or similar debtor suffering a liquidity crunch and facing the prospect of failure presents many economic, legal, and policy challenges.  Oftentimes, rescue financing may avoid the need to resort to bankruptcy, provide the debtor with the breathing spell it needs, and enable its creditors to protect their position.  Our attorneys' years of experience can help assess the risk-reward matrix that is so critical to a lender's decision whether to provide rescue financing.

In-Court Restructurings.  Sometimes, the competing interests of lender groups of different lien priorities and/or the claims of other stakeholders are not conducive to resolution through out-of-court negotiations, resorting to proceedings under chapter 9 of the Bankruptcy Code or other applicable state law.  With the deep bench of its Distressed Municipal Finance Group, Cadwalader has the extensive experience needed to navigate the many nuances and potential pitfalls associated with the protection and enforcement of these numerous competing interests under federal or state law.

Post-Petition Financings.   Providing post-petition financing often presents an opportunity for existing lenders to improve their lien priority and security position.  Also, post-petition arrangements often allow lenders that are new to the borrower to obtain the strongest position in the debt structure.  Navigating the post-petition process not only requires a solid grounding in credit, but a learned familiarity with bankruptcy courts and the constituencies that may voice concerns in connection with the financing.  Our attorneys have handled many notable post-petition financings.

Exit Financings.  Opportunities for lenders do not exist solely at the commencement and during the pendency of a bankruptcy case.  Assessing the attractiveness of extending credit to a debtor emerging from bankruptcy requires attorneys possessing a proficient understanding of the bankruptcy process as well as the credit markets.  Attorneys in our Distressed Municipal Finance Group have represented clients in numerous exit financings.

Notable distressed and/or complex municipal financings in which we have been involved include the following representations:

• Detroit Public Schools in connection with initial preparation for Chapter 9 filing, pre-petition financing, and negotiations of concessions under collective bargaining agreements.
• Several financial institutions in connection with the Chapter 9 bankruptcy proceedings of Orange County, California.
• A lender in the $375 million syndicated bridge loan to Louisiana Citizens Property Insurance Corporation as it struggled to pay post-Hurricane Katrina claims.
• Several financial institutions in a $1 billion bridge loan (2001) and subsequent permanent financing (2002) to the State of California during its energy crisis.
• A dealer in the restructuring of several interest rate swaps with the City of Detroit having an aggregate termination value of $400 million.
• Several creditors of the Commonwealth of Puerto Rico in connection with its sales tax credit, which was created to maintain its market access in light of constitutional and credit constraints.
• Greater Southeast Community Hospital Corporation in its chapter 11 reorganization before the United States Bankruptcy Court for the District of Columbia.
• Saint Vincents Catholic Medical Center of New York in its chapter 11 reorganization before the United States Bankruptcy Court for the Southern District of New York, which included restructuring debt obligations issued through the Dormitory Authority of the State of New York.
• An interest rate swap counterparty in connection with a defaulting not-for-profit retirement community.
• A credit enhancer in the settlement of litigation between a California municipality (purportedly repudiating its obligations) and a swap dealer.
• A lender in connection with the restructuring of distressed tax-exempt debt and subordinate loans secured by low-income housing projects.
• An investment bank in the restructuring and workout of a loan secured by healthcare facilities.
• A financial institution in the restructuring of the debt of an institution of higher learning.
• A non-profit borrower of over $300 million in tax-exempt bonds.

Other notable bankruptcy and municipal finance experience includes:

• The U.S. Treasury Department Presidential Auto Task Force with respect to the restructuring of Chrysler LLC and General Motors Corporation and their related finance companies, including the debtor-in-possession financings.
• Lyondell Chemical in its chapter 11 cases, including the $8 billion debtor-in-possession financing, secured from a consortium of 14 banks, the largest private financing ever.
• A leading financial institution in connection with the bankruptcy proceedings of Lehman Brothers Holdings Inc. and its affiliates.
• Several of the largest sponsors of municipal tender option bond programs and auction rate programs, as well as a wide variety of investors in the short-term and residual classes of these programs.
• The underwriter and issuer in the first registration with the Securities and Exchange Commission of pass-through interests in pre-refunded municipal bonds.
• An ad hoc group of eight sponsors of tender option programs to assist them in discussions with the Internal Revenue Service regarding a proposed change in the treatment of certain aspects of these programs, and to develop industry-wide procedures and documentation to comply with the new Revenue Procedure that ensued from such discussions.
• The New Products Committee of SIFMA, including providing advice on the development of its guiding principles for the municipal derivatives market.
• GE Capital as DIP lender in connection with a $1.7 billion DIP loan in the bankruptcy case of Delta Airlines, one of the largest "roll-up" DIP loans ever approved.
• Citibank as DIP lender (on a co-lending basis with JPMorgan Chase Bank) to Enron Corp.
• Citicorp North America, Inc. as administrative agent for a $850 million exit loan and four series of reimbursement agreements and Bank One, N.A. as administrative agent for an $345 million exit loan and four series of reimbursement agreements in the bankruptcy case of Pacific Gas and Electric Company.