Murtha Means More

Bankruptcy & Creditors' Rights


Contact: Robert E. Kaelin, Co-Chair

Contact: Thomas S. Vangel, Co-Chair

Our Bankruptcy and Creditors' Rights Group has represented both creditors and debtors in bankruptcy, workouts, foreclosures and creditors' rights litigation for over 30 years. Our lawyers have counseled parties involved 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. Our co-chairs each have approximately 20 years experience practicing in the bankruptcy court. The group can call upon lawyers in other disciplines such as labor, environmental, real estate, corporate, pensions and environmental to render assistance when needed.

Our clients have called on us to play substantial roles in major bankruptcy cases. We represented a group of creditors in initiating what became the largest bankruptcy in Connecticut history and have taken substantial roles on behalf of creditors in the Massachusetts bankruptcy courts as well. We represented both the first Connecticut hospital to file Chapter 7 bankruptcy and one of the first companies ever to use the unique jurisdiction of the bankruptcy court to resolve liability for thousands of personal injury cases across the country in a single proceeding. As a result of this broad experience we are able to represent our clients in virtually any aspect of bankruptcy litigation.

Distressed companies need skilled assistance to quickly and efficiently evaluate their options. We have assisted/counseled numerous companies (and at times individuals) in seeking 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 have represented them in chapter 7 liquidations, as well as in orderly state court dissolutions. Our team frequently calls upon other attorneys within the firm to assist in guiding troubled companies through the process, and we have extensive relationships with various financial advisors or restructuring professionals to also assist in the process when necessary. Furthermore, our team has assisted numerous directors and officers of troubled companies navigate the mind fields of fiduciary obligation in the zone of insolvency.

We regularly represent both secured and unsecured creditors in evaluating all their legal options in dealing with financially troubled borrowers or companies. We seek to efficiently and effectively pursue the recovery of monies owed. We seek to advance the client’s interests, whether through consensual restructuring of debt, forbearance arrangements or litigation when necessary. Our team includes experienced litigators who frequently prosecute a wide variety of collection actions, including foreclosure, replevin and Connecticut 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.

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. Our team is routinely called up to litigate in bankruptcy courts motions to dismiss or to convert cases, motions for relief, as well as contested bankruptcy confirmation hearings. Moreover, our team has extensive experience litigating (both prosecuting and defending) preference actions, fraudulent conveyance actions, non-discharge or non-dischargability actions, claims litigation and director & officer claims.

Our lawyers have been involved in the sale of troubled companies in and out of bankruptcy in a variety of industries including healthcare, manufacturing, construction and high-tech. 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 can assist clients in evaluating the risk in a transaction, suggest strategies to accomplish their goals and advise them as to whether or not their goals can be best accomplished through a bankruptcy Section 363 sale or an Article 9 sale. We have represented both debtors and purchasers in all aspects of a Section 363 sale and liquidating Chapter 11 cases. We also have been called upon to represent clients in several “loan to own” transactions.

Two of our partners are members of United States Trustee’s panel of trustees. In that capacity they have been appointed as trustees in literally thousands of Chapter 11 and Chapter 7 cases over the years. They are involved in the valuation and sale of assets of companies in a wide variety of industries. In each case, Murtha Cullina has served as counsel and represented them in connection with 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 have investigated numerous claims involving the validity of liens held by secured creditors, director and officer liability issues, insurance coverage and preference and/or fraudulent transfer actions.

Creditors’ Committees are often formed in midsize to large Chapter 11 cases. The creditors’ committee is an integral part of the bankruptcy process. 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.

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 represent the company in its pending 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 represent 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.
  • In addition, the Firm has represented many companies in closing down with a minimum of disruption, litigation and adverse publicity, utilizing self-managed liquidations, assignments for benefit of creditors, and other legal tools.

Representing the Trustee

  • Bluewater Hld. Corp., one of the largest septic contractors in Massachusetts. We represented the Chapter 7 Trustee in all matters including claims regarding the validity and priority of liens and director and officer liability claims.
  • Get Connected, Inc., a broadband, wireless and satellite technology company. We represented the Chapter 7 Trustee in all matters including director and officer liability claims and all litigation brought in this case.
  • Kasden Fuel Company, a major Connecticut fuel oil distributor. We represented the Chapter 11 trustee in stabilizing the business and selling the business within five months of his appointment.
  • Stadium Management Corp., owner of the stadium where home games of the New England Patriots football team were played. We represented the Chapter 11 Trustee in selling the stadium and resolving litigation on terms providing a substantial distribution to creditors.
  • Viking Financial Group, this debtor ran a Ponzi scheme in Boston for several years. We represent the Chapter 7 Trustee in all matters including so called “claw back” actions against those who benefited from the Ponzi scheme.
  • Inofin Incorporated, this debtor ran a subprime automobile finance business. We represented the Chapter 7 Trustee in all matters including malpractice actions against its accountant and its national law firm.
  • Upper Crust, LLC, this debtor operated a dozen upscale pizza restaurants in the Boston area. We represented the Chapter 7 Trustee in all matters including the sale of all of the debtor’s locations, resolving all landlord claims and litigating with the majority owner of the debtor.
  • In addition, the Firm represents state and federal court receivers, assignees for the benefit of creditors, and other non-bankruptcy fiduciaries acting for the benefit of creditors.

Representing the Creditors’ Committee

  • 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%.

Representing Creditors

  • W.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.
  • In addition, the Firm regularly represents secured creditors in exercising their rights outside bankruptcy, and in connection with any bankruptcy or other proceeding the borrower might commence.

Creditors’ Rights Litigation

  • We 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.
  • We 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.
  • We successfully represented a publicly traded regional bank in lender liability case involving a failed 108 unit housing development. After a ten 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.
  • We represent the principal of a major heating oil distributor facing millions of dollars of liabilities in connection with the company’s failure.
  • We represented managers affiliated with a Fortune 500 company in resolving creditors’ claims arising out of the failure of a subsidiary.
  • We 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.
  • We have represented the bankruptcy estate or the defendants in hundreds of preference cases in courts throughout the northeast.
  • In addition, the Firm regularly appears on behalf of creditors in the Southern and Eastern Districts of New York, since our Stamford, CT, office represents a cost-effective alternative to engaging counsel in
  • New York City.
Description

Contact: Robert E. Kaelin, Co-Chair

Contact: Thomas S. Vangel, Co-Chair

Our Bankruptcy and Creditors' Rights Group has represented both creditors and debtors in bankruptcy, workouts, foreclosures and creditors' rights litigation for over 30 years. Our lawyers have counseled parties involved 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. Our co-chairs each have approximately 20 years experience practicing in the bankruptcy court. The group can call upon lawyers in other disciplines such as labor, environmental, real estate, corporate, pensions and environmental to render assistance when needed.

Our clients have called on us to play substantial roles in major bankruptcy cases. We represented a group of creditors in initiating what became the largest bankruptcy in Connecticut history and have taken substantial roles on behalf of creditors in the Massachusetts bankruptcy courts as well. We represented both the first Connecticut hospital to file Chapter 7 bankruptcy and one of the first companies ever to use the unique jurisdiction of the bankruptcy court to resolve liability for thousands of personal injury cases across the country in a single proceeding. As a result of this broad experience we are able to represent our clients in virtually any aspect of bankruptcy litigation.

Distressed companies need skilled assistance to quickly and efficiently evaluate their options. We have assisted/counseled numerous companies (and at times individuals) in seeking 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 have represented them in chapter 7 liquidations, as well as in orderly state court dissolutions. Our team frequently calls upon other attorneys within the firm to assist in guiding troubled companies through the process, and we have extensive relationships with various financial advisors or restructuring professionals to also assist in the process when necessary. Furthermore, our team has assisted numerous directors and officers of troubled companies navigate the mind fields of fiduciary obligation in the zone of insolvency.

We regularly represent both secured and unsecured creditors in evaluating all their legal options in dealing with financially troubled borrowers or companies. We seek to efficiently and effectively pursue the recovery of monies owed. We seek to advance the client’s interests, whether through consensual restructuring of debt, forbearance arrangements or litigation when necessary. Our team includes experienced litigators who frequently prosecute a wide variety of collection actions, including foreclosure, replevin and Connecticut 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.

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. Our team is routinely called up to litigate in bankruptcy courts motions to dismiss or to convert cases, motions for relief, as well as contested bankruptcy confirmation hearings. Moreover, our team has extensive experience litigating (both prosecuting and defending) preference actions, fraudulent conveyance actions, non-discharge or non-dischargability actions, claims litigation and director & officer claims.

Our lawyers have been involved in the sale of troubled companies in and out of bankruptcy in a variety of industries including healthcare, manufacturing, construction and high-tech. 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 can assist clients in evaluating the risk in a transaction, suggest strategies to accomplish their goals and advise them as to whether or not their goals can be best accomplished through a bankruptcy Section 363 sale or an Article 9 sale. We have represented both debtors and purchasers in all aspects of a Section 363 sale and liquidating Chapter 11 cases. We also have been called upon to represent clients in several “loan to own” transactions.

Two of our partners are members of United States Trustee’s panel of trustees. In that capacity they have been appointed as trustees in literally thousands of Chapter 11 and Chapter 7 cases over the years. They are involved in the valuation and sale of assets of companies in a wide variety of industries. In each case, Murtha Cullina has served as counsel and represented them in connection with 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 have investigated numerous claims involving the validity of liens held by secured creditors, director and officer liability issues, insurance coverage and preference and/or fraudulent transfer actions.

Creditors’ Committees are often formed in midsize to large Chapter 11 cases. The creditors’ committee is an integral part of the bankruptcy process. 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.

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 represent the company in its pending 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 represent 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.
  • In addition, the Firm has represented many companies in closing down with a minimum of disruption, litigation and adverse publicity, utilizing self-managed liquidations, assignments for benefit of creditors, and other legal tools.

Representing the Trustee

  • Bluewater Hld. Corp., one of the largest septic contractors in Massachusetts. We represented the Chapter 7 Trustee in all matters including claims regarding the validity and priority of liens and director and officer liability claims.
  • Get Connected, Inc., a broadband, wireless and satellite technology company. We represented the Chapter 7 Trustee in all matters including director and officer liability claims and all litigation brought in this case.
  • Kasden Fuel Company, a major Connecticut fuel oil distributor. We represented the Chapter 11 trustee in stabilizing the business and selling the business within five months of his appointment.
  • Stadium Management Corp., owner of the stadium where home games of the New England Patriots football team were played. We represented the Chapter 11 Trustee in selling the stadium and resolving litigation on terms providing a substantial distribution to creditors.
  • Viking Financial Group, this debtor ran a Ponzi scheme in Boston for several years. We represent the Chapter 7 Trustee in all matters including so called “claw back” actions against those who benefited from the Ponzi scheme.
  • Inofin Incorporated, this debtor ran a subprime automobile finance business. We represented the Chapter 7 Trustee in all matters including malpractice actions against its accountant and its national law firm.
  • Upper Crust, LLC, this debtor operated a dozen upscale pizza restaurants in the Boston area. We represented the Chapter 7 Trustee in all matters including the sale of all of the debtor’s locations, resolving all landlord claims and litigating with the majority owner of the debtor.
  • In addition, the Firm represents state and federal court receivers, assignees for the benefit of creditors, and other non-bankruptcy fiduciaries acting for the benefit of creditors.

Representing the Creditors’ Committee

  • 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%.

Representing Creditors

  • W.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.
  • In addition, the Firm regularly represents secured creditors in exercising their rights outside bankruptcy, and in connection with any bankruptcy or other proceeding the borrower might commence.

Creditors’ Rights Litigation

  • We 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.
  • We 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.
  • We successfully represented a publicly traded regional bank in lender liability case involving a failed 108 unit housing development. After a ten 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.
  • We represent the principal of a major heating oil distributor facing millions of dollars of liabilities in connection with the company’s failure.
  • We represented managers affiliated with a Fortune 500 company in resolving creditors’ claims arising out of the failure of a subsidiary.
  • We 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.
  • We have represented the bankruptcy estate or the defendants in hundreds of preference cases in courts throughout the northeast.
  • In addition, the Firm regularly appears on behalf of creditors in the Southern and Eastern Districts of New York, since our Stamford, CT, office represents a cost-effective alternative to engaging counsel in
  • New York City.
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