Drinker Biddle maintains a full service workout and bankruptcy practice. As a result of the firm’s historic representation of creditors such as banks, finance companies and insurance companies, over the years the firm developed a fully integrated "cradle to grave" approach to commercial workouts, restructurings, and bankruptcy proceedings.
Workout Advice and Documentation. The Group regularly represents financial institutions in pre-bankruptcy workout negotiations and structuring, and, if successful, the documentation of such transactions. We address lien priority and perfection issues, intercreditor and subordination matters, and disputes with bondholders groups and venture capital investors. We handle all aspects of out-of-court compositions and asset dispositions which, by necessity, require pre-bankruptcy planning and transfer avoidance analysis. The Group’s lawyers have participated in the workout and restructurings in the media, retail, telecommunications, equipment suppliers, manufacturing, transportation, healthcare and real estate industries.
Chapter 11 Bankruptcy Cases. During the last decade, our bankruptcy practice has grown rapidly, and we have expanded to meet the needs of our clients and of the largest cases. Our experience in representing creditors has resulted in the firm being engaged to represent creditors’ and bondholders’ committees, and today the firm regularly undertakes committee engagements. In these cases we represent secured and unsecured creditors, bankruptcy trustees and committees, debtors, and companies interested in acquiring assets from bankruptcy estates.
Secured Creditor and Lease Finance Representation. The firm’s lawyers are often involved in the representation of secured creditors and lease finance parties, including banks, finance companies, insurance firms and other financial institutions. Our lawyers regularly litigate relief from stay and cash collateral issues, and are involved on a daily basis in drafting and negotiating plans of reorganization. We have represented secured creditors in negotiating and advancing competing or "hostile" reorganization plans. We have defended secured creditors in bankruptcy and non-bankruptcy litigation involving lender liability issues.
A significant portion of our practice involves representing leasing companies in the leasing and/or finance of equipment and other personal property, ranging from vehicle tractor trailer fleets to telecommunications switches to medical equipment used in the operation of hospitals. Our lawyers have extensive experience in issues concerning "true leases" vs. "secured financing transactions," involving the interplay between executory contract disposition and adequate protection of interests held by secured creditors. We are also experienced in vendor finance programs. We address valuation issues regularly concerning equipment and other finance transactions.
Committees. We are selected regularly to represent Official Unsecured Creditors’ Committees, Official Bondholders’ Committees and other statutory committees in Chapter 11 cases. Such appointments have included appointments in numerous industries and significant cases such as Bethlehem Steel Corporation, Insilco Technologies, Velocita Corp., Kiwi International Airlines, Resorts International, International American Homes, Inc., The Regina Company, Gitman Bros. Shirt Co., Manhattan Bagel Company and Virginia Carolina Tools, Inc. Committee representations often require that the firm litigate claims on behalf of the estate that the debtor is unable or unwilling to pursue, and our bankruptcy attorneys prosecute such claims.
Debtors. The firm represents corporations and partnerships as debtors-in-possession in proceedings under Chapter 11. Such representations include Mutual Benefit Overseas, Inc., Parklane Hosiery, Mannkraft Corporation and Lermer Packaging Corporation. We have found that our debtor representations usually present issues of significant complexity requiring a joint effort with our lawyers who concentrate on pension, environmental, health care, corporate governance, tax and labor matters.
Asset Sales and Acquisitions. Our practice often involves the representation of corporate clients in the acquisition of assets from companies in Chapter 7 or 11 proceedings. These representations generally call for a sophisticated mix of strategic planning, multi-party negotiation and complex valuation litigation. Acquisitions in the bankruptcy context are always conducted against the background of potential litigation in the bankruptcy court, and we have found that there is a significant need for lawyers able to represent the client in both the business and litigation sides of the transaction. We have, for example, represented the purchaser in bankruptcy acquisitions in Trenton, New Jersey (waste transfer station) (toothpaste manufacturer), Chattanooga, Tennessee (independent television station), Pittsburgh, Pennsylvania (mobile television equipment), Oakland, California (office buildings), New Orleans, Louisiana (apartment complex), Provo, Utah (emergency medical helicopters), San Diego, California (biotechnology), Bucks County, Pennsylvania (life care community) and Milwaukee, Wisconsin (agricultural company), Palm Beach, Florida (diagnostic health centers), and Chicago, Illinois (commercial real estate and real estate leases).
Bond Restructuring. The firm has had particular experience in restructuring bond indebtedness both in and out of formal Chapter 11 proceedings. In out-of-court restructurings we have been involved in the design and coordination of solicitation efforts for widely dispersed bond holdings. We implemented an out-of-court restructuring by obtaining an injunction preventing an indenture trustee from distributing a debt service reserve fund pending completion of an out-of-court solicitation. In another case we prepared a "pre-packaged" bankruptcy case involving real estate-backed bond debt and arranged for sale of the bonds.
Adversary Proceedings. While we are frequently involved in representing unsecured creditors in bankruptcy proceedings, we spend a good deal of time advising clients who hope to avoid being unsecured creditors in bankruptcy. We counsel credit managers of our corporate clients concerning problem accounts of their customers. Our lawyers have extensive experience in both prosecuting and defending preference and fraudulent conveyance actions brought by debtors, committees, trustees, and liquidating trusts, an area of enhanced activity in recent years.
Special Counsel Representations. Our firm is regularly engaged as special counsel or co-counsel to other law firms in bankruptcy matters, including bankruptcy acquisitions. In these matters our role varies from lead bankruptcy counsel to special consultant or advisor. We have often been retained by bankruptcy trustees and committees as special counsel to pursue complicated bankruptcy litigation for the benefit of the creditors of the estate.
Collection Activities, Personal Property and UCC Foreclosures, Receiverships and Dispositions. The firm’s integrated approach to creditors’ rights enforcement also includes matters outside of the bankruptcy process. The Group handles guaranty enforcement litigation, collateral contests, letter of credit litigation, judicial and non-judicial UCC foreclosures, confession of judgment litigation (where applicable), real estate receiverships and foreclosures, and collection actions such as state law receiverships, judicial and non-judicial Uniform Commercial Code dispositions, and UCC foreclosure proceedings. Members of the Group routinely handle non-judicial private and public sales of collateral under the Uniform Commercial Code, and counsel clients on issues pertaining to the commercial reasonableness of private and public sale procedures.