Practice/Industry Group Overview
In times of tightening credit and liquidity, lenders, borrowers, trade vendors, landlords and lessors face increasing financial risks. Many clients are surprised at the speed with which action must be taken to preserve their rights in a bankruptcy case.
Spilman’s bankruptcy and creditors’ rights lawyers have represented parties in cash collateral disputes, preference actions, asset purchases and sales, reclamation claims, executory contract and leasing issues, and numerous bankruptcy litigation matters, including automatic stay, equitable subordination, fraudulent transfer, and claims objections. We also counsel clients through the disclosure and plan confirmation process, and, when necessary, we have represented clients through the bankruptcy appeals process in the District and Circuit Courts.
Problem loan workouts require knowledge of a broad spectrum of legal fields, including litigation, secured lending, real estate, fraudulent conveyances, corporate law, taxation and the Uniform Commercial Code. While each of these areas of the law can be challenging in their own right, they become even more difficult when the Bankruptcy Code applies along with them. Spilman’s lawyers have extensive experience in all of these areas and take pride in bringing creative solutions to minimize financial risk in many difficult situations.
Outside bankruptcy, the firm has extensive experience assisting creditors with out-of-court workout matters. We frequently assist clients in reviewing loan documents and assist in protective action in anticipation of possible bankruptcy filings by borrowers or pledgors. We also counsel clients in negotiating and drafting forbearance agreements and in the sale of distressed loans. When necessary, we have the experience and knowledge to aggressively pursue state law remedies, such as collateral recovery, injunctions, attachments, replevin and detinue actions, foreclosure auctions, and secured party sales.
Trade Vendors and Suppliers
Spilman’s bankruptcy and creditors’ rights lawyers assist in protecting clients against credit risks before a customer bankruptcy filing. We deliver value to clients proactively by advising our client’s business and legal personnel regarding the adoption of credit management techniques before a customer files bankruptcy that can increase the client’s likely recovery if the customer later files bankruptcy while also reducing the risk of liability in a preference lawsuit.
When a customer files bankruptcy, it is essential to have a law firm move quickly as creditor recoveries can decline significantly if the proper action is not taken immediately. We help clients maximize recoveries by ensuring that they aggressively and timely assert their rights, including (i) reclamation demands, (ii) section 503(b)(9) administrative claims, (iii) stoppage of delivery rights, (iv) UCC adequate assurance rights, and (v) executory contract rights, including cure claims. We also develop creative solutions aimed at maximizing recoveries while preserving future revenue when the debtor remains a viable customer.
Debtors and Troubled Companies
Spilman’s lawyers have experience in representing debtors and troubled companies in all aspects of financial reorganization both in bankruptcy court and outside of bankruptcy court.
In Chapter 11 cases, creditors’ committees play an important role. Spilman’s bankruptcy lawyers have served as counsel to numerous creditors’ committees. Additionally, our lawyers have served as counsel to committee members, including the chairs of those committees.
Landlords and Equipment Lessors
Spilman lawyers are experienced in all areas of representing landlords and equipment lessors in collection matters and in bankruptcy court. With the adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, these creditors have increased rights relating to the assumption or rejection of leases. Experienced counsel is essential to ensure that these rights are properly leveraged to achieve the client’s business goals.
Distressed Asset Acquisitions
Companies have discovered the steep discount that can be paid for assets of financially distressed companies. Both established and start-up companies with valuable new technologies often find themselves under-capitalized and in need of purchaser. Often, with creditors at the door, these companies must seek refuge in Chapter 11 – and opportunity can abound. These cases generally move very quickly. A purchaser may miss the full potential of such an acquisition without the benefit of a multidisciplinary legal team consisting of lawyers with experience in bankruptcy, mergers and acquisitions, labor and employment, environmental, intellectual property, and product liability issues, to name a few.
Spilman’s lawyers have extensive experience representing purchasers of “distressed assets,” and we can deploy the value of the Spilman legal model across a full range of practice areas to represent clients in acquiring assets of distressed companies – which may have great potential to increase a client’s future bottom line.
For more information regarding our bankruptcy and creditors' rights practice, contact:
Paul M Black
Arch W. Riley, Jr.