Bankruptcy and Corporate Restructuring

Selling Derivative Claims

Mon, 30 Aug 2010 11:37:56 -0400

The financial crisis has resulted in the termination of billions of dollars worth of derivatives between sophisticated market participants. When a defaulting party files for bankruptcy, the non-defaulting party is often left with a claim against the estate of its counterparty--and claims holders may seek to monetize them by selling to third parties.

Steven B. Levine, Finance Practice Group Leader at Brown Rudnick, and Timothy C. Bennett, Associate at Brown Rudnick, run through the considerations potential sellers should have in mind when negotiating and documenting a claim sale.

To learn more, please read the article Selling Derivative Claims in Derivatives Week on our website.

Frederick's Sees Attraction of Liquidation Firms' Lending Arms

Steven B. Levine (slevine@brownrudnick.com) — Thu, 26 Aug 2010 11:36:04 -0400

Today it is common for liquidation firms to appear among the names of a company's lenders as an alternative source to a bank. For example, earlier this month, Frederick's of Hollywood Group Inc. closed a $7 million loan with a lender affiliated with a liquidation firm as part of its recapitalization and strategic turnaround.

In this article, Steven B. Levine, Brown Rudnick’s Finance Practice Group Leader, offers insight on the attraction of liquidation firms.

To learn more, please click here.

LBIE - Recent Court of Appeal Judgment in Relation to the Client Monies Issue

Tue, 17 Aug 2010 11:03:01 -0400

Below is a summary of the Court of Appeal’s judgment of 2 August 2010 in relation to the ownership of client funds held by LBIE at the date of administration (the so-called "client monies" issue). Those funds were subject to a statutory trust imposed by Chapter 7 of the Client Asset Sourcebook, known as "CASS7" (the FSA’s client money rules).

For more information, please click here.

U.S. Bankruptcy Court Grants Chapter 15 Foreign Main Recognition to Fairfield Funds

Tue, 3 Aug 2010 10:42:12 -0400

On July 22, 2010, the U.S. Bankruptcy Court for the Southern District of New York (Lifland, J.) entered an order recognizing the insolvency proceedings pending in the British Virgin Islands in respect of three BVI-registered hedge funds - Fairfield Sentry Limited and two other related funds - as foreign main proceedings under Chapter 15 of the Bankruptcy Code. The Fairfield funds were the largest of the so-called Bernard Madoff "feeder funds," and, up until the disclosure of the Madoff fraud in December 2008, certain of their activities could be said to have taken place in New York City. Brown Rudnick LLP represented the BVI court-appointed liquidators for the Fairfield funds in their efforts to obtain Chapter 15 recognition of the BVI proceedings in U.S. Bankruptcy Court.

For more information, please click here.

Lehman Brothers Fallout

Tue, 29 Jun 2010 16:31:35 -0400

Louise Verrill and Sonya Van de Graaff overview some of the imaginative uses of current insolvency and company legislation since the insolvency of Lehman Brothers.

Click here to view the full article.

Brown Rudnick's European Litigation Bulletin - June 2010

Tue, 29 Jun 2010 16:23:42 -0400

Welcome to the summer edition of Brown Rudnick's European Litigation Bulletin. This electronic newsletter highlights the latest regulatory news and case information related to commercial litigation and anti-corruption.

Please click here to read the current issue.

Federal Appellate Court Affirms Debtors' Ability to Bar their Senior Lenders from using Debt Owed to them to try to Purchase the Bankrupt Companies' Assets at Auction

Wed, 7 Apr 2010 15:44:15 -0400

The United States Court of Appeals for the Third Circuit very recently upheld the ability of Chapter 11 debtors Philadelphia Newspapers, LLC and its bankrupt affiliates to preclude senior lenders from "credit bidding" their debt at the public auction of the debtors’ assets.

For more information, please click here.

Brown Rudnick's European Insolvency and Litigation Bulletin - February 2010

Tue, 2 Mar 2010 15:05:52 -0500

Welcome to Brown Rudnick's European Insolvency and Litigation Bulletin. This electronic newsletter highlights the latest regulatory news and case information related to the bankruptcy, corporate restructuring, finance, anti-corruption, and commercial litigation sectors.

The February 2010 issue compares the different treatment given by courts to cash flow waterfalls in enforcement scenarios.

For more information, please click here.

Investor Directors of Distressed Companies: How Should They Act?

(James Shaw) jshaw@brownrudnick.com & (Louise Verrill) lverrill@brownrudnick.com — Tue, 14 Apr 2009 13:23:37 -0400

For most private equity and venture capital firms, it is an established industry practice to appoint their partner(s) to act as investor director(s) in their portfolio companies with a view to gaining more active supervision and management of the company. Few, if any, questions have been asked, and scant concerns have been raised about this standard practice during the recent golden era of finance. After all, most companies performed well, and in good times there is rare occasion to question the performance and prudence of the directors. However, the current financial turmoil is casting doubt on this standard practice. Irrespective of how or why a director holds office, he or she still has certain duties and responsibilities.

For more information, please click here.

Brown Rudnick Is Recognized by Latin Lawyer Magazine As Counsel in Restructuring "Deal of the Year"

Tue, 14 Apr 2009 13:07:01 -0400

On March 5, 2009, the publishers of Latin Lawyer recognized the international law firm of Brown Rudnick for its role as legal counsel to the Ad Hoc Committee of Bondholders of the Cerro Negro heavy oil project in Venezuela, owned in a joint venture by subsidiaries of ExxonMobil, BP, and Petróleos de Venezuela, S.A. (PDVSA).

For more information, please click here.

The Cross-Jurisdictional Perfection of Security

acatoir@brownrudnick.com (Anne-France Catoir) — Tue, 7 Apr 2009 15:01:44 -0400

International insolvency measures have never had greater practical importance than in this market. The main principle governing insolvency proceedings internationally is the equality of creditors in the distribution of the assets. This is usually subject to the priority afforded by a security interest in the assets. Therefore it is key that a secured creditor is confident that his security is enforceable.

For more information, please click here.

A Liquidating Trustee’s Principal Tools for Resolving Tax Issues in Bankruptcies

Tue, 7 Apr 2009 15:00:02 -0400

As part of making distributions to allowed claimants of a bankrupt entity, a liquidating trustee must decide the best way to handle potential outstanding tax liabilities.

For more information, please click here.