Insolvency matters are rarely straightforward—for debtors or creditors.

For debtors, our experience gained from decades of guiding financially distressed companies covers early stage evaluations, planning and implementing out-of-court restructurings, and chapter 11 bankruptcy reorganizations.

Likewise, we offer representation to secured and unsecured creditors, creditors’ committees, landlords, and equity holders in creative recovery solutions, as well as strategic purchasers of distressed assets. We also have extensive experience in insolvency-related litigation, including preference and fraudulent transfer claims, along with debt enforcement actions.

We get to know our clients’ businesses—whether debtor or creditor—grow personally involved in the work, and aim for the best possible outcome.

Pre-Bankruptcy and Bankruptcy Counsel

A company on the brink of insolvency often will need to restore a level of integrity in their business operations to ensure that others—including vendors, lenders, and employees—believe they are doing all that they can do to make good on their debts and avoid bankruptcy. In pre-bankruptcy matters, our team approaches each client’s particular circumstances, considering their business goals, market trends, and potential outcomes. We can help build and negotiate sustainable workout plans with creditors, restructure finances and operations for more efficiency, and find other solutions to prevent bankruptcy, such as new financings, sales, joint ventures, and licensing deals.

In addition, we work closely with other Farella practice groups, including real estate, insurance coverage, intellectual property, and tax to provide customized, multi-disciplinary assistance, advice, and representation to meet our clients’ needs.

Bankruptcy and Insolvency-Related Litigation

In bankruptcy litigation, we address the compressed time frames common to bankruptcy courts and leverage the unique substantive law and procedural rules that make it different from other commercial litigation. We represent clients in contentious litigation matters brought under the Bankruptcy Code or non-bankruptcy law.

Areas of litigation we regularly handle include:

  • Fraudulent transfer claims (under both Bankruptcy Code and state law)
  • Preference actions
  • Fraud and other misconduct claims
  • Breach of fiduciary duty and other director and officer liabilities
  • Equitable subordination claims
  • Claims seeking to re-characterize debt as equity
  • Alter ego/piercing the corporate veil claims

Additionally, we have decades of litigation experience representing creditors in enforcing debts owed to them. We excel in pursuing provisional remedies, including prejudgment attachment of assets and receiverships, as well as proceedings to locate and seize assets to satisfy debts owed to our clients.

Real Estate Specialty

While our experience covers a range of industries, from wineries and hospitality to alternative energy and insurance, our insolvency specialists are frequently engaged by real estate interests to navigate the unique rules which affect the landlord-tenant relationship both in and outside of bankruptcy. We have particular success in enforcing rights in retail bankruptcy cases that negatively impact commercial shopping center properties, whether through negotiation or litigation.

Clients in real estate-heavy industries also engage us to protect their equity investments and defend claims made or threatened against them as guarantors, directors, or officers, among others.

Asset Sales and Recovery

Buying or selling a distressed business raises a host of risks and potential problems not typically found in the acquisition of a healthy, solvent business. Our lawyers specializing in this area provide savvy, sophisticated counsel, and handle everything from due diligence and negotiations to the preparation of complex closing documentation for both buyers and sellers of financially distressed businesses.

In asset recovery matters related to insolvency, our attorneys excel at drafting agreements to maximize clients’ rights, including perfecting security interests in all types of collateral and negotiating and documenting complex inter-creditor and subordination agreements.

Other Restructuring and Insolvency Services

Firm Highlights

Publication

Three Steps Licensees Can Take to Protect Their IP Rights in Bankruptcy

During periods of widespread economic disruption such as the present, operating businesses must be able to identify and respond to threats to the financial health of their contracting counterparts in order to protect key...

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Publication

Wine Businesses, Lenders, and Difficult Conversations

The COVID-19 pandemic and public health efforts to combat it will impact different wine businesses in different ways. Those that depend on on-premise and direct-to-consumer (DTC) sales, such as restaurant, hospitality, and tasting room...

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Publication

How Grape Growers Can Protect Their Interests When a Winery Approaches Insolvency

A lot goes into the making of great wine, and when a winery becomes financially unstable, there are multiple competing interests that need to be satisfied, including the banks that provide the winery with...

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Publication

Non-Residential Lease Default Workouts, Security Deposits and Bankruptcy

What are the bankruptcy implications of the treatment of a tenant’s security deposit following a payment default?  Many non-residential tenants are now or are likely in the future to be unable to pay rent...

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Publication

Treatment of Commercial Leases in Tenant Bankruptcy - The Basics

As the COVID-19 pandemic continues to wreak havoc with the nation’s economy, we have started to see bankruptcy filings by well-known companies such as GNC, J. Crew, Neiman Marcus, Modell’s, 24 Hour Fitness, Gold’s...

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Publication

Protecting Suppliers and Customers of Insolvent or Bankrupt Companies

Some 3,600 companies having already  filed for Chapter 11 protection  in the first half of 2020—more than in any year since 2012—and many are bracing for an even greater surge of bankruptcy filings before...

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Publication

Hospitality Companies and Their Lenders: Preparing for Difficult Conversations

In a sudden reversal of generally expansionary trends, the hospitality business has been among the most immediate and badly hit economic sectors as a result of the COVID-19 pandemic, and the resulting stay-at-home and...

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Publication

Questions Wineries Need to Answer Before Talking With Lenders About Coronavirus-Caused Financial Woes

The coronavirus pandemic and public health efforts to combat it will impact different wine businesses in different ways. Those that depend upon on-premise and direct-to-consumer (DTC) sales — such as restaurant, hospitality, and tasting room...

Read More