Practice Areas & Industries: Sullivan & Cromwell LLP

Practice/Industry Group Overview

For decades, Sullivan & Cromwell has represented creditors, debtors, defendants in avoidance proceedings, asset purchasers, and other interested parties in bankruptcy cases, out-of-court workouts and restructurings, and other insolvency matters.

S&C is known for its excellence in handling the most complex and challenging transactions in its various practice areas. Our bankruptcy and creditors' rights practice is no exception. Our debtor representations normally seek to avoid bankruptcy proceedings in favor of out-of-court restructurings. For example, we advised Allegheny Energy in a series of asset sales and a restructuring of senior debt, Crown American Properties in its debt restructurings, and Niagara Mohawk in the restructuring of its long-term power contracts. Our out-of-court restructuring advice is a natural outgrowth of our preeminent securities practice.

We have been extremely active in private and sovereign debt restructurings in Latin America. For example, we advised Siderúrgica del Orinoco (Sidor) and Consorcio Siderúrgica Amazonia (Amazonia) on the successful restructuring of US$ 3 billion of their debt. We represented Transportadora de Gas del Sur in connection with its US$ 1 billion debt restructuring in 2004. Our lawyers were involved in the innovative repackaging of defaulted sovereign loans into so-called "Brady Bonds" during the early 1990s. More recently, we advised the international dealer-managers on the exchange offer by the Republic of Argentina to holders of bonds with an aggregate principal amount of approximately US$ 80 billion, the largest sovereign liability management transaction ever. S&C has been influential in the policy debate over sovereign debt restructuring, helping develop and implement "majority action clauses" in sovereign bonds as a way to avoid creditor gridlock in a financial crisis.

Other prominent recent engagements include representations of:

• Adelphia Communications - representation of debtor in possession as special M&A counsel responsible for the sale of substantially all its assets - the largest bankruptcy disposition to date;
• Enron - representation of the purchaser of the debtor in possession's energy trading business;
• Intelsat - advice to the purchaser of a satellite fleet from the debtor in possession;
• New York State Banking Department - as respondent in ancillary proceedings relating to the New York branches of Jugobanka and Beogradska Banka;
• NRG Energy - advice to a group of power project lenders to subsidiaries of NRG on corporate law and bank regulatory matters arising out of the foreclosure on their collateral in bankruptcy;
• Primestone - foreclosure on a substantial interest in a REIT, including obtaining dismissal of a Chapter 11 case filed to block the foreclosure and defending the commercial reasonableness of the foreclosure in the Delaware Chancery and Supreme Courts; and
• Siderar - advice in connection with the restructuring of approximately US$ 470 million of outstanding debt, consisting of floating rate notes and bank loans under various trade facilities.

Our leveraged finance practice includes representation of lenders that provide debtor-in-possession financings. For example, we recently represented the DIP lenders to Silicon Graphics as it reorganized under Chapter 11.

S&C also defends creditors, shareholders, and professionals in proceedings instituted by debtors in possession and bankruptcy trustees based on alleged fraudulent transfers, preferences, lenders' liability, professional malpractice, and other matters. The Firm was actively involved in the defense of fraudulent conveyance claims in the first case to hold that the selling stockholders in an LBO are protected by the Bankruptcy Code's safe harbor for securities settlement payments, In re Kaiser Steel Corp. Recent significant creditor representations include acting for:

• AIG Financial Products - as creditor in the Chapter 11 case of Northwest Airlines;
• AIG Financial Products - as creditor in the Chapter 11 case of US Airways;
• One of the largest unsecured creditors - in the Cayman Islands winding up of High Risk Opportunities Hub Fund, including representation of the creditor as a member of the creditors committee;
• Mitsui & Co. (USA) - in the bankruptcy filing of Asarco LLC; and
• UBS AG - as the defendant in the largest of the proceedings commenced by Enron Corp. to avoid prepetition payments to settle equity forwards and swaps.

S&C gives advice and provides opinions on bankruptcy issues arising in complex transactions and novel deal structures for healthy companies, such as the AAA derivative product companies formed by several of its clients, and the applicability of bankruptcy principles to a variety of debt and equity securities and derivative products.

Practice Contacts

Robinson B. Lacy
New York
P +1-212-558-4000
F +1-212-558-3588
lacyr@sullcrom.com

Erik D. Lindauer
New York
P +1-212-558-3548
F +1-212-558-3588
lindauere@sullcrom.com