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Distressed Municipal Finance


"The preeminent practice for sophisticated municipal investors," providing "both legal and regulatory expertise." – Legal 500

Cadwalader's municipal practice is nationally recognized for its creativity, technical savvy and sophisticated market knowledge. Legal 500 recently commended our "broader municipal perspective" and "excellent practice in both municipal finance and bankruptcy" and further noted that we are "highly regarded because of [our] demonstrated ability to add value in a highly cost-effective manner, and provide thoughtful, diligent and very commercial advice."

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 preeminent in their field, are well known to courts and global financial institutions and have achieved favorable results in many complex and significant reorganizations. Lary Stromfeld was recently acknowledged by Legal 500 as a Leading Lawyer in Municipal Bankruptcy along with Mark Ellenberg and Ivan Loncar who were also commended. 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 settlements, industrial development, public power, public pension plan investing, general obligation debt, lease financings, special assessment and sales tax revenues.

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

  • Advising a monoline insurer in connection with the potential restructuring of several billion dollars of debt issued by the Commonwealth of Puerto Rico and its public agencies.
  • Advising a swap dealer in connection with the potential termination and restructuring of "in-the-money" swaps with the City of Detroit, which added a pledge of casino revenues. The restructuring was awarded the 2009 Alternative Transaction Deal of the Year by The Bond Buyer.
  • Advising a swap dealer in connection with the appointment of an emergency manager and bankruptcy filing of the City of Detroit.
  • Advising various creditors and interested parties in Jefferson County's chapter 9 case, including advising a sewer warrantholder in the negotiation of the County's plan of adjustment.
  • 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 and subsequent permanent financing to the State of California during its energy crisis.
  • 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:

  • 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. Cadwalader was awarded "Law Firm of the Year" in 2012 by the International Financial Law Review for this representation.
  • 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.
  • Counsel to 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.

7 Attorneys

Bagby, Ingrid Partner New York
T. +1 212 504 6894
Curtin, Thomas J. Special Counsel New York
T. +1 212 504 6063
Ellenberg, Mark C. Consulting Attorney Washington
T. +1 202 862 2238
Hawkins, Howard R. Jr. Senior Counsel New York
T. +1 212 504 6422
Loncar, Ivan Partner New York
T. +1 212 504 6339
Servais, Casey John Partner New York
T. +1 212 504 6193
Stromfeld, Lary Partner New York
T. +1 212 504 6291