Bankruptcy Litigation

Cadwalader "figure[s] out how to move a case forward and achieve the best results, whether it be by negotiating or litigating." - Chambers USA

High stakes restructurings move fast and can be very contentious. Time and time again, Cadwalader's bankruptcy litigators have achieved landmark successes and highly favorable settlements for debtors, secured lenders, and major financial institutions as unsecured creditors and other parties in some of the largest and most contentious bankruptcy matters on record, including the City of Detroit, In re Lehman Brothers Holdings, Lyondell Chemical Company, Chrysler, General Motors, Dynegy Holdings, Enron, Fabrikant, Mirant, Fred Leighton, Blockbuster, Steve & Barry's, Tribune Company, Tronox Incorporated/Anadarko, Bay Harbour, and Apollo Health Street.

Our bankruptcy litigation team has represented major banks and dealers as derivatives counterparties to major debtors, won approval of the largest private debtor-in-possession financing in history, counseled clients in resolving some of the largest fraudulent transfer actions ever brought, and has successfully represented both buyers and sellers in hotly contested bankruptcy sales. We have won contested plan confirmation and enterprise valuation hearings, and obtained important rulings in high-profile substantive consolidation and equitable subordination cases. On behalf of creditors, we have utilized the examiner and trustee process to achieve important strategic goals. Our attorneys have also litigated virtually every other type of matter arising in bankruptcy cases.

  • Bank of America Merrill Lynch as interest rate swap counterparty to the City of Detroit in connection with a $1.4 billion offering of Certificates of Participation, and related litigation with swap insurers regarding settlement and termination of the swaps.
  • Morgan Stanley as a major derivative counterparty creditor to multiple Lehman Brothers debtors in obtaining high recoveries on $1.4 billion in claims arising from the close-out of 40,000 trades that Morgan Stanley maintained with various Lehman affiliates.
  • A major investment bank as a material witness in an action brought by the litigation trust established under the plan of reorganization of Crescent Resources, LLC, in which the litigation trustee alleged claims for actual and constructive fraudulent transfer against Duke Energy Corporation and other defendants in order to avoid the transfer of $1.187 billion arising out of the leveraged buy-out of Crescent from Duke where the investment bank served as lender and transaction advisor.
  • A major investment bank as a material witness in an action brought by the litigation trust established under the plan of reorganization of FairPoint Communications Inc., in which the litigation trustee alleged claims for actual and constructive fraudulent transfer against Verizon Communications, Inc. and other defendants in order to avoid the transfer of over $2 billion arising out of a Reverse Morris Trust transaction that spun-off FairPoint from Verizon where the investment bank served as underwriter and transaction advisor.
  • Vertis Communications and its affiliates as debtors in various contested matters during their chapter 11 cases in Delaware that, among other things, resulted in the successful 363 sale of Vertis' marketing communications business to Quad/Graphics Inc. for $260 million, secured approval of a $4.3 million key employee incentive plan over the objection of the U.S. Trustee, and successfully enjoined a third party from tortiously interfering with the debtors' existing contractual and business relationships and obstructing the sale of the debtors' businesses.
  • Caribbean Petroleum Corporation and its affiliates as debtor in various contested matters during in their chapter 11 cases in Delaware that, among other things, resulted in the successful 363 sale of Caribbean Petroleum's business, eliminated over $1 billion of indemnification claims against the debtors' estates, and enforced the terms of the debtors' confirmed plan of liquidation, challenges to which have been successfully defeated on appeal to the U.S. District Court for the District of Delaware and are pending before the Third Circuit Court of Appeals.
  • The Renco Group, LLC, the parent company of RG Steel, and its Chief Executive Officer in a breach of fiduciary duty action commenced by the official committee of unsecured creditors in RG Steel's chapter 11 cases pending in Delaware.
  • Deltec Bank and Trust Ltd. in clawback claims brought by the foreign liquidator of Fairfield Sentry.
  • Lyondell Chemical Company as debtor in securing approval of the largest privately-financed debtor-in-possession financing package at the time, in obtaining an injunction against claims against European affiliates who guaranteed claims of debtors but are not themselves debtors, and in numerous other contested matters.
  • Citigroup Global Markets as defendants in an adversary proceeding filed by the chapter 11 trustee in the Thornburg Mortgage bankruptcy cases in Maryland seeking to avoid over $2 billion in transfers and other obligations that Thornburg made or assumed prior to bankruptcy.
  • The Joint Provisional Liquidators of Lehman Re Ltd., a former Bermuda reinsurance subsidiary of Lehman Brothers, in (i) its U.S. chapter 15 case and related litigation, including obtaining a settlement between Lehman Re and the Lehman U.S. debtors resolving over $1 billion in claims, and (ii) avoidance and other litigations commenced by certain debtors in the SunCal chapter 11 cases in California.
  • ABN Amro Bank, N.V. as a defendant in a fraudulent transfer proceeding brought by the Official Committee of Unsecured Creditors in the chapter 11 cases of M. Fabrikant & Sons, Inc., alleging damages of approximately $80 million against ABN Amro Bank as an alleged recipient of both actual and constructively fraudulent transfers and preferences.
  • The Royal Bank of Scotland and certain of its affiliates as named defendants in an adversary proceeding commenced in the Tribune chapter 11 cases that seeks redress on account of a leveraged buyout transaction by which the Tribune company converted to a privately held company in 2007, as well as in certain related state court constructive fraudulent transfer actions which, like in the bankruptcy adversary proceeding, creditors are prosecuting individual claims and seeking to avoid and recover transfers of proceeds received by the respective defendants thereto in connection with the LBO transaction.
  • The Royal Bank of Scotland plc in its capacities as both the single largest prepetition secured lender and as the postpetition DIP financing lender in the chapter 11 cases commenced in July 2011 of Marco Polo Seatrade B.V., an Amsterdam-based international commercial vessel management company, and certain of its affiliates, in New York. RBS was owed approximately $125 million on a 2007 loan secured by mortgages on three of the debtors' six ships. Cadwalader advised RBS with respect to jurisdictional issues arising from the U.S. chapter 11 filings (which ultimately resulted in a trial against the debtors), the perfection and priority of the security granted to the various creditors of Marco Polo under English law, the negotiation and documentation of the DIP loan, and the negotiation and documentation of the global settlement agreement among the debtors, RBS, Marco Polo's other secured lenders, and the Official Committee of Unsecured Creditors. Under the global settlement agreement, which served as the foundation for the debtors' plan of liquidation, RBS recovered the three vessels and cash collateral securing its loan.
  • Enron Corp. as debtor-plaintiff in more than 40 separate adversary proceedings in its chapter 11 cases seeking to recover monies owed to the Enron estate under swaps, forwards, and other derivative contracts, successfully recovering $2 billion for, and eliminating several billion dollars of claims against, the estate.
  • Northwest Airlines as debtor in several adversary proceedings and contested matters related to its chapter 11 cases in New York, including defeating challenges to plan confirmation, achieving substantive consolidation of certain debtors, and obtaining seminal decision disallowing over $1.2 billion of claims filed by a flight attendant union on grounds that damage claims do not arise from rejection of collective bargaining agreements.
  • Bay Harbour and affiliated funds and individuals in defeating breach of fiduciary duty claims brought by the official committee of unsecured creditors in Steve & Barry's chapter 11 cases.
  • Apollo Health Street, Inc. in contesting an involuntary bankruptcy petition filed against Apollo by certain of the company's creditors which led to the dismissal of the case and a significant recovery from the petitioning creditors.
  • Merrill Lynch as secured lender in the chapter 11 cases of jewelry retailer Fred Leighton and its affiliates in which Cadwalader successfully defended against challenges to Merrill Lynch's liens and claims and aggressively pursued claims of fraud and wrongdoing against the debtor and its owner that resulted in the appointment of an independent chief restructuring officer, recovery of misappropriated collateral, and incarceration of Fred Leighton's owner.

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14 Attorneys

Ariel, Donny Associate New York
T. +1 212 504 6710
Bagby, Ingrid Partner New York
T. +1 212 504 6894
Borgeson, Kathryn M. Associate Washington
T. +1 202 862 2384
Curtin, Thomas J. Associate New York
T. +1 212 504 6063
Dodson, Peter M. Senior Counsel Washington
T. +1 202 862 2287
Ellenberg, Mark C. Consulting Attorney Washington
T. +1 202 862 2238
Greenberg, Andrew M. Associate New York
T. +1 212 504 6077
Halstead, Ellen M. Special Counsel New York
T. +1 212 504 6732
Hawkins, Howard R. Jr. Senior Counsel New York
T. +1 212 504 6422
Maman, Michele C. Partner New York
T. +1 212 504 6975
Nevins, Richard Partner London
T. +44 (0) 20 7170 8624
Petrick, Gregory M. Partner London
T. +44 (0) 20 7170 8688
New York
T. +1 212 504 6373
Servais, Casey John Associate New York
T. +1 212 504 6193
Stephansen, Nicole M. Associate London
T. +44 (0) 20 7170 8648

Contact(s)

Ingrid Bagby
+1 212 504 6894 
ingrid.bagby@cwt.com
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Howard R. Hawkins
+1 212 504 6422 
howard.hawkins@cwt.com
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