Financial Restructuring, Bankruptcy and Creditors' Rights

Harris Beach Murtha’s Financial Restructuring, Bankruptcy and Creditors’ Rights Practice Group has represented creditors, debtors and trustees in bankruptcy proceedings, and primarily creditors in workout, foreclosure and creditors’ rights litigation for decades. We assist our clients in navigating the countless statutes and complex procedures involved in these proceedings, whether in New York, Massachusetts, Connecticut or other states around the country. In fact, we represented a group of creditors in initiating what became the largest bankruptcy in Connecticut history.

Our attorneys represent bankruptcy trustees and examiners, indenture trustees and other fiduciaries in all areas of disputes. We defend financial institutions and other entities in check fraud and Uniform Commercial Code (UCC)-based disputes. We help clients in a wide array of industries to ensure financial restructuring, bankruptcy and creditors’ rights issues are resolved to their best benefit and we achieve optimal results. We serve as court-appointed trustees and trustee counsel, as receivers and referees in bankruptcy and foreclosure matters, and we provide extensive legal counsel in commercial and financial planning, debt refinancing and restructuring, commercial contract dispute resolution, bankruptcy, foreclosure, distressed investments, commercial and consumer collection and UCC compliance.

Our work also includes assisting financially distressed organizations in corporate and partnership restructurings, receiverships and dissolutions outside of bankruptcy. The firm also has assisted potential purchasers of assets from troubled companies both in and out of bankruptcy.

We regularly represent both secured and unsecured creditors in evaluating all legal options when dealing with financially troubled borrowers or companies, seeking to efficiently and effectively pursue the recovery of collateral and monies owed. We seek to advance the client’s interests, whether through consensual restructuring of debt, forbearance arrangements or litigation, if necessary.

Our creditors’ rights attorneys analyze our clients’ rights and responsibilities under previously executed, or yet to be executed, documentation and under applicable statutes, regulations and judicial decisions.

We provide alternative solutions to various financial challenges, including all areas of bankruptcy, refinancing, assignments for the benefit of creditors, litigation, pursuit of various debtors and foreclosures.

Our lawyers include experienced litigators who frequently prosecute a wide variety of collection actions, including foreclosure, replevin and prejudgment remedy actions. To this end, our team is very experienced in pursuing and collecting money judgments. In addition, our team also frequently represents commercial landlords in dealing with troubled tenants, both in and out of bankruptcy.

Some of the largest names in financial services routinely trust Harris Beach Murtha to assist in their collection challenges. Our team has extensive experience in all areas of retail, consumer, commercial and subrogation collections and has earned a reputation for aggressively and efficiently obtaining and collecting judgments for creditors.

With offices throughout New York, Massachusetts and Connecticut, we have the extended reach to handle our clients’ collection matters from a regional, rather than an outsourced, platform. Collections is a key component of our Financial Restructuring, Bankruptcy, and Creditors’ Rights Practice Group, and our knowledge of bankruptcy gives us an edge in negotiations and allows us to better advise our clients regarding their rights as creditors.

We handle unusually complicated collection matters involving debtors who have transferred assets or have created successor entities to avoid judgments. Our team of attorneys, collectors, legal assistants and skip tracers utilize highly specialized collection and litigation techniques to maximize recovery. We utilize Collect Max™ software. This uniquely flexible, user-friendly collections software allows us to develop a client-specific collection process which automates and streamlines the workflow and maintains all of the information we need on any given collection file.

We provide comprehensive collection of secured and unsecured debt, legal and collateral recovery services to financial institutions, governmental agencies and businesses with retail and commercial accounts. We work closely with clients and leverage the latest technology to effectively help them reduce delinquency, minimize losses, increase recovery and improve cash flow.

We regularly represent long-term care and assisted living facilities with regard to collection and guardianship matters. These matters often involve pursuing recovery of gifted assets by utilizing state voidable and fraudulent transfer statutes. We also specialize in representing facilities and other creditors in estate proceedings.

Our collections experience includes purchased debt, credit cards, student loans, foreclosures, replevins, medical and municipal debt, bankruptcies, mechanics liens and estate claims. We also handle a broad range of unsecured debt including retail installment contracts, all matters of bank debt, promissory notes, lines of credit, overdrafts, defaulted leases and insurance premiums.

While bankruptcy often includes consensus building and restructuring compromises, it often also includes litigation of numerous types of matters, whether through the contested matters procedure or adversary proceedings. Harris Beach Murtha represents clients in all forms of commercial litigation, in bankruptcy matters, and in foreclosure proceedings, including surplus money proceedings and deficiency judgment collections.

We represent banks and lending institutions involved in cash collateral lending situations and those seeking to participate in debtor-in-possession funding opportunities. We also represent clients seeking to purchase assets through or outside of the bankruptcy process.

We defend clients against lender liability claims and in sales of specific credits or entire portfolios of troubled assets. We also defend clients against preference and fraudulent conveyance claims brought against them in bankruptcy and state courts.

We help with the sale of troubled companies in and out of bankruptcy in a variety of industries, including healthcare, manufacturing and construction. The solution for numerous small to midmarket companies in distress is to effectuate a sale of some or all of their assets, often within a short timeframe and a contentious atmosphere.

We assist clients in evaluating the risk in a transaction, suggest strategies to accomplish their goals and advise them as to whether their goals can be best accomplished through a bankruptcy Section 363 sale or an Article 9 sale. We represent both debtors and purchasers in all aspects of a Section 363 sale and liquidating Chapter 11 cases. We also assist clients with “loan to own” transactions.

We assist our clients in acquiring and disposing of distressed property throughout the United States and internationally by offering counsel in foreclosure and bankruptcy matters. Our attorneys also help clients negotiate acquisitions before the seller enters bankruptcy or foreclosure.

Distressed companies need skilled assistance to quickly and efficiently evaluate their options. We assist companies across all industries to negotiate consensual restructuring arrangements with their creditors outside of bankruptcy.

When necessary, our team has represented numerous companies through the bankruptcy process. This may include a Chapter 11 filing for companies seeking to reorganize or conducting their own orderly liquidation through a Chapter 11 liquidating plan.

For those companies that cannot be saved, we assist with Chapter 7 liquidations, as well as state court dissolutions. We guide troubled companies through the process, and, when necessary, call on our extensive relationships with various financial advisors or restructuring professionals to assist. Furthermore, our team has assisted numerous directors and officers of troubled companies navigate the minefields of fiduciary obligation in the zone of insolvency.

Creditors’ committees are often formed in midsize to large Chapter 11 cases. We have represented numerous creditors’ committees over the years, assisting them with the fulfilling of their fiduciary obligations, including evaluating purchase or restructuring offers, investigating insider dealings, analyzing liens of secured creditors and negotiating and/or proposing plans of reorganization with debtors.

Two of our partners are members of United States Trustee Program’s Panel of Trustees and have served in that capacity as trustees in thousands of Chapter 11 and Chapter 7 cases.

Our attorneys are involved in the valuation and sale of assets of companies in a wide variety of industries. They counsel on every aspect of the reorganization or liquidation process. In addition, members of our team frequently represent other trustees in the region. As counsel to trustees, we investigate the validity of liens held by secured creditors, director and officer liability issues, insurance coverage and preference and/or fraudulent transfer actions.

Practice Leader(s)

Mark G. DeGiacomo

Member

(585) 419-8738

ktompsett@harrisbeachmurtha.com

Team

Jennifer Babula

Law Clerk

(585) 419-8629

jyoung@harrisbeachmurtha.com

Representing Companies in Chapter 11

DB Companies, Inc., a chain of 150 convenience stores and gas stations in the northeast, with revenues of $175 million. We represented the company in selling its retail locations through Chapter 11.
Groves in Lincoln, Inc., a senior living facility with outstanding bond debt of $88 million. We represented the company in its Chapter 11 case in which the business was successfully sold as a going concern.
Helicos BioSciences Corp., a publicly held manufacturer of gene sequencing equipment. We represented the company in a Chapter 11 case focused on maximizing the value of its intellectual property.
BioTransplant Incorporated, a publicly held developer of therapeutics to suppress undesired immune responses. We represented the company in connection with its liquidating Chapter 11 plan under which creditors were paid in full.
New Hampshire Electric Cooperative, Inc., an electric utility with approximately 60,000 customers and $270 million in debt. We represented the utility in obtaining confirmation of a Chapter 11 plan that restructured debt resulting from investment in a nuclear power plant while maintaining the utility as an independent company.
Sigg Switzerland (USA), Inc., the American affiliate of a worldwide seller of water bottles. We served as counsel to the company, achieving a successful sale of the company’s business in Chapter 11 within 60 days of the filing.
Waste Systems International, Inc., a solid waste disposal company with liabilities of $150 million. We represented the company in its successful Chapter 11 reorganization, in which the equity sponsor retained ownership in exchange for an additional investment.
Raytech Corporation, a manufacturer of brakes and clutches for the automotive industry facing $3 billion of asbestos personal injury claims. We represented the company in obtaining confirmation of a Chapter 11 plan establishing a trust for the payment of asbestos claims.
NordicTrack, Inc., a manufacturer of exercise equipment with peak sales of $480 million. We represented the company in its Chapter 11 case involving sale of the company’s trade name and inventory.

Accomplishing an Out-of-Court Restructuring

A mid-sized Connecticut manufacturing company. We represented the company in an out-of-court restructuring with its senior lender and several creditor constituencies.
Diam International, Inc., a designer and manufacturer of retail product displays with sales of $250 million. We represented the company in an out-of-court restructuring whereby almost half of its revolving credit facility of $100 million was forgiven, and the common stock remained in the hands of the equity sponsor.
Insurance Holdings of America, an insurance marketing and technology company with liabilities of $30 million. We served as creditors’ trustee under an out-of-court wind-down arrangement approved by creditors as a quicker and less expensive alternative to bankruptcy.
Education Loan Services, Inc., a loan-servicing company responsible for $3.4 billion in student loans owned by 80 different client financial institutions. We represented the company in an out-of-court program successfully transferring the loan portfolios to other servicers while avoiding the enormous loss to clients that would have resulted from a sudden cessation of servicing.
Represented many companies in closing with a minimum of disruption, litigation and adverse publicity, utilizing self-managed liquidations, assignments for benefit of creditors and other legal tools.

Creditors’ Rights Litigation

Served as lead counsel for the plaintiff in a federal court action seeking to set aside over $28 million in fraudulently transferred assets and, with federal prosecutors, in enforcing a $3.275 billion dollar restitution order.
Recovered an $11 million judgment for a bank client in the Massachusetts Superior Court in connection with litigation brought against guarantors of a failed 200-unit condominium development.
Successfully represented a publicly traded regional bank in lender liability case involving a failed 108-unit housing development. After a 10-day trial in Superior Court, we recovered $4.8 million judgment for the bank client plus attorneys’ fees and defeated entirely a $5.8 million counterclaim asserted by the developer.
Represented the principal of a major heating oil distributor facing millions of dollars of liabilities in connection with the company’s failure.
Represented managers affiliated with a Fortune 500 company in resolving creditors’ claims arising out of the failure of a subsidiary.
Regularly counsel directors and officers, as well as the companies they serve, concerning D&O insurance coverage, including the special issues that arise when the company is insolvent.
Represented the bankruptcy estate or the defendants in hundreds of preference cases in courts throughout the northeast.
Regularly appear on behalf of creditors in the Southern and Eastern Districts of New York, since our Stamford, Connecticut office represents a cost-effective alternative to engaging counsel in New York City.
R. Grace & Co., a construction materials company that incurred more than $2 billion of asbestos-related liabilities. We represent one of the hardest hit groups of claimants: those suffering asbestos disease or death from Grace’s infamous operation in Libby, Montana.
Buckingham Oil Interests, Inc., owner of oil and gas interests in Texas and throughout the Southwest. After Buckingham filed under Chapter 11, we were engaged to represent the bank that held a lien on the income-producing assets. We succeeded in obtaining transfer of the assets to the bank.
Vestis Retail Group, LLC et al., a national sporting goods and clothing retailer in Chapter 11 in Delaware. We represent a commercial landlord.
NAMCO, LLC, pool, patio and game room retailer Chapter 11 in Delaware. We represented one of its commercial landlords.
Stone & Stant, national restaurant chain franchisee Chapter 11 in Delaware. We represented the franchisor in the bankruptcy.
Regularly represent secured creditors in exercising their rights outside bankruptcy, and in connection with any bankruptcy or other proceeding the borrower might commence.

Gold Hill Mining Company, owner and operator of gold mines in Alaska. We represented the creditors’ committee, and are now counsel to the Plan Oversight Committee, in obtaining confirmation of a joint plan of reorganization providing for a five-year payout to unsecured creditors.
Derecktor Shipyards LLC, a shipyard that has closed. We represent the creditors’ committee in overseeing sale of the shipyard’s assets.
AGC, Inc., a manufacturer of parts for the aerospace industry. We represented the creditors’ committee in causing an expedited sale of the company, and now represent the Liquidation Custodian in litigation against former directors of the company.
Mason & Hamlin Corp., a 150-year-old piano manufacturer, among the most distinguished in the American piano industry. We represented the creditors’ committee in defeating management’s Chapter 11 plan offering 14% payment to creditors and obtaining confirmation of the committee’s own plan paying more than 70%.

Chapter 11 Bankruptcies and Workouts

Handle workout, forbearance and bankruptcy matters for various corporate clients including agricultural and mezzanine lenders, regional banks, and others.
Represent industrial development agencies and municipalities in Chapter 11 cases to protect their interests.
Assisted mall landlord in J. Crew, J.C. Penney and General Nutrition Corporation Chapter 11 cases.
Represent interested parties in the Buffalo Diocese, Rochester Diocese and Rockville Centre Diocese Chapter 11 bankruptcy cases.
Representation of multiple municipalities in multibillion-dollar Chapter 11 bankruptcies of mega pharmaceutical companies for claims of damages related to the opioid crisis.
Represented debtor in large Chapter 11 case of a brewery/restaurant operation in Upstate New York.
Filed the first Chapter 15 cross border case in bankruptcy court in the Syracuse Division of the Northern District of New York.
Chapter 7 and Chapter 11 Trustee for the Office of the United States Trustee for 28 years and served as counsel for the Trustee.
Represent Bond Surety Company throughout the country in small, medium and mega Chapter 11 bankruptcies with large environmental and remediation issues.
Assist agricultural lender in several large Chapter 11 and 12 bankruptcies and workouts throughout New York State.
Represent buyers and drafts bankruptcy related attorney opinion letters in multimillion-dollar sale and loan transactions.
Defend clients in preference and fraudulent conveyance actions in bankruptcy court.
Represent buyer of a commercial laundry plant in complicated section 363 sale process.

Collections and Fraudulent Conveyances

Represent various financial institutions in New York State courts related to collections and breach of contract issues.
Lead attorney in various complex commercial collection litigation matters for many firm clients ranging from small family-owned businesses to multimillion dollar companies.
Represent health care and long-term care facilities in litigation including voidable transfer/fraudulent conveyance and Medicaid issues and estate proceedings.
Represent corporate client in pursuing fraudulent conveyances/alter ego claims in state court resulting in recovery in full.

Foreclosures and Receiverships

Qualified by Office of Court Administration to be appointed receiver, counsel to receiver and referee.
Court-appointed counsel to receivers in commercial cases in Central New York, including hotels and rental properties.
Represent national lending institutions and loan servicers in residential foreclosures in all 62 counties of New York State, including many government-sponsored enterprises such as Fannie Mae and Freddie Mac.
Represent local banks and agricultural lending institution in residential and commercial foreclosures and collection efforts including replevin of equipment and machinery throughout New York State.
Berkshire Bank v. Fawer (Supreme Court, NY County): ongoing representation of lender in multimillion dollar foreclosure of residential condominium in New York City. Successful defense of multiple appeals in the First Department.
Wells Fargo National Association as Trustee for Morgan Stanley Bank of America Merrill Lynch Trust 2015-C20, Commercial Mortgage Pass-Through Certificates, Series 2015-C20 v Syracuse Airport Express, LLC et al. (Supreme Court Onondaga County); representation of Receiver in foreclosure of mortgage on Holiday Inn Express.

UCC and Other Related Matters

Represent secured creditors and purchasers in uniform commercial code sales and acquisition of various businesses.
Assist lenders with defending security interests in collateral and challenges of proper perfection and related issues.

Financial Restructuring, Bankruptcy and Creditors’ Rights

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