Creditors' Rights and Bankruptcy Litigation
Gould & Ratner has been retained by parties involved in high profile bankruptcy litigation, and other sophisticated creditors' rights disputes. Examples of our work in this area include:
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Creditors' Rights Litigation. We represented a publicly-traded commercial finance company with respect to this litigation, in which it sought recovery pursuant to the financing documents contained in a license agreement for certain software which was licensed to a mortgage company by one of the world's largest software companies. The matter was successfully resolved, based upon an agreed settlement between the parties. The issues that were involved in this matter included enforceability under the UCC of certain "hell or high water language" contained in the finance documents.
Creditors' Rights Claim. The firm represented one of the largest manufacturers of truck trailers in North America, in its $10 million claim against the guarantors of a settlement agreement between the manufacturer and a Detroit-area dealer and distributor. As part of the settlement agreement, the dealer/distributor pledged security interests and mortgages upon numerous personal assets held by the owners, mainly real estate interests located throughout the State of Michigan. Ultimately, they filed for Chapter 11 and we were able to arrive at an amicable settlement in which they agreed to auction or sell their real estate interests for the benefit of the manufacturer and agreed to waive any litigation and claims they held against our client.
Creditors' Rights, Foreclosure Actions. The firm has represented the small business division of a major commercial finance company in numerous litigation matters involving claims against a myriad of financially troubled entities. The actions have involved foreclosure of security interests, either in real property or personal property.
Shareholder Litigation. The firm was retained by a former principal shareholder of a "quick print" franchising corporation, which filed for bankruptcy in the Bankruptcy Court for the Eastern District of Michigan. The company's creditors filed a series of preference actions to recover more than $14 million which our client allegedly had taken out of the corporation in the period preceding the bankruptcy. We settled the case on very favorable terms after an extended mediation.
Illinois Tobacco Litigation. Gould & Ratner has served as special UCC and bankruptcy law counsel to the plaintiffs' law firm in the case of Price v. Philip Morris USA Inc., which prior to Gould & Ratner's retention obtained a $10 billion judgment against Philip Morris USA, on behalf of the class consisting of the citizens of Illinois who purchased Marlboro Lights and Cambridge Light cigarettes from approximately 1970 onward. Gould & Ratner's involvement has focused on the granting and perfection of a security interest in the assets of Philip Morris which were pledged to secure a supersedeas bond approved by the trial court.
United Airlines Bankruptcy. Gould & Ratner served as Chicago counsel to the beneficiary of trusts pursuant to which United Airlines leased two 737-300 and two 757 airplanes from the trustee/owner. The firm's engagement has focused on the terms pursuant to which United Airlines is retaining the airplanes while making lease payments. This is the largest airline bankruptcy in history.
K-Mart Bankruptcy. We served as Chicago counsel to a group of real estate partnership interests in the K-Mart Chapter 11 case that owned approximately 37 of the partnership/lessor partnerships which leased various store sites to K-Mart throughout the country. The firm's engagement principally focused upon the terms pursuant to which K-Mart either assumed or rejected various of the leasehold interests as well as the filing and allowance of cure claims and rejection claims on behalf of the landlord interests.
Clark Retail Enterprises Bankruptcy. The firm represented a major commercial finance company which was the mortgagee for 46 service stations and convenience stores leased to Clark Retail Enterprises by its second-tier subsidiary corporation, WHP Acquisition I, LLC. The debtor, Clark Retail Enterprises, conducted an orderly liquidation sale of all of its real estate assets and our client's collateral was included within the liquidation.
Joy Recovery Technology Bankruptcy. The firm represents the liquidating trustee of the liquidating trust established pursuant to Joy's Chapter 11 plan, which commenced litigation seeking to recover a fraudulent conveyance in excess of $2 million. After a lengthy trial, the judge found in favor of our client and entered a judgment, totaling approximately $4.8 million, against two of the company's shareholders.
Shopping Center Bankruptcy. One of our partners represented the debtor, the owner of a large shopping center in New Mexico, in Chapter 11 proceedings. After extensive litigation involving its major secured lender, we successfully confirmed a Chapter 11 plan in which the lender agreed to the return of its collateral in exchange for agreement to plan confirmation.