Sonnenschein has handled workout, reorganization and bankruptcy matters throughout the United States for a wide variety of clients. Much of our experience in these areas cannot be neatly categorized as either "workout" or "bankruptcy" related. Indeed, one of the hallmarks of our practice has been an acute awareness of the overlap between these two disciplines -- and the importance of offering experience and expertise in both workouts and bankruptcies in order to provide maximum flexibility and achieve the most effective results.
A brief overview of our experience in each of these areas follows:
Workouts
Sonnenschein has a broad range of experience representing participants in out-of-court debt restructuring matters. This work includes:
- review of loan documentation and lenders’ collateral positions for existing and potential defects, including enforcement problems;
- advice concerning the strategies that lenders can and should pursue in connection with troubled loans, including minimization of potential lender liability exposure;
- evaluation of borrower restructuring proposals and development of alternatives;
- analysis of borrowers’ positions and likely resort to bankruptcy, and assessment of lenders’ options in bankruptcy proceedings;
- preparation of the legal documentation to implement out-of-court workout solutions and/or to support position in the event of a court proceeding;
- appropriate litigation (including representation in bankruptcy court or enforcement proceedings) if a satisfactory out-of-court solution cannot be reached; and
- analysis of related issues, including net operating loss carryforwards and related tax issues, lender liability, successor liability and other related matters.
Bankruptcy and Reorganization Matters
Our workout, reorganization and bankruptcy lawyers have been heavily involved in virtually every type of bankruptcy court proceeding under the U.S. Bankruptcy Code, as well as several foreign insolvency proceedings. This work has included every phase of representation, from pre-bankruptcy planning and cash collateral hearings through confirmation of reorganization plans. We have dealt with several pre-packaged and pre-negotiated Chapter 11 plans, including one confirmed within 91 days of the case being filed. The lawyers in our bankruptcy practice have drafted numerous workout agreements, plans of reorganization, and disclosure statements. We are familiar with all aspects of creditors’ rights, including lender liability issues. We also have extensive experience at handling a wide variety of litigation matters in the context of bankruptcy proceedings.
Counseling on Bankruptcy and Related Issues
Our bankruptcy and restructuring lawyers regularly work with clients and counsel in the drafting of "front-end" loan documents. Our work in this area involves inclusion of enforceable protective provisions in the event of repayment difficulties, including, for example, protection against possible fraudulent conveyance implications of loan transactions or possible substantive consolidation/piercing the corporate veil attacks and possible breaches of fiduciary duties to creditors. We also regularly represent acquirers of assets from various distressed targets in out of court asset purchases, foreclosure sales and Bankruptcy Section 363 asset sales.
State Law Insolvencies and Receiverships
We have been heavily involved in many of the largest insurance company and health care provider insolvencies, which often involve a state law receivership, conservatorship or similar proceeding, sometimes in conjunction with a bankruptcy case or insolvency proceedings in other nations. There are significant differences between these kinds of proceedings and a traditional Chapter 11 case under the United States Bankruptcy Code. Also, there are often important jurisdictional issues, especially when a series of related entities are being reorganized or liquidated in several different legal forums.
Asbestos and Other Insurance Related Matters
A number of large entities have filed bankruptcy in the past few years to address an overwhelming number of asbestos, tort or similar types of claims. These proceedings often involve a variety of different types of insurance coverage and layers of insurers over a wide range of time periods. They also involve an intersection of bankruptcy courts handling certain issues with litigation, arbitration or mediation of claims in other forums, as well as certain appeal and other bonds.
Real Estate Related Issues
We regularly address a wide range of real estate related issues arising in an insolvency context from a variety of viewpoints. These issues include leaseholds, shopping malls, easements, ground leases, environmental claims, specialized governmental loan programs (such as HUD loans), and securitizations. We have extensive experience with transactions involving bankruptcy remote structuring considerations.
