Creditors Rights and Bankruptcy

The creditors rights and bankruptcy practice of Balch & Bingham LLP regularly represents creditors, distressed companies, and other major parties-in-interest in out-of-court restructurings, Chapter 11 bankruptcy cases, commercial litigation, and other credit defaults. The lawyers in the practice are experienced in representing secured and unsecured creditors, DIP and exit facility lenders, distressed companies, committees, equity holders, investors and acquirers. The scope of the practice includes many major industry groups and involves clients and venues in the Southeastern United States and throughout the country.

Our lawyers, in addition to helping clients in reorganization cases and non-judicial workouts, regularly advise management concerning their duties to equity holders, creditors and others. Working with other practice groups in the firm, the creditors rights and bankruptcy practice also designs transactions, restructurings and corporate policies to mitigate the adverse effects of an insolvency.

Creditor Representation

Balch & Bingham LLP frequently represents institutional creditors in the management of their troubled credits. These include commercial and investment banks, savings institutions, investment funds, hospitals, universities, construction companies, insurance companies, indenture trustees, commercial landlords, utilities, and equipment lessors. Since the firm has one of the largest banking practices in the Southeast, it represents secured and unsecured lenders, DIP lenders, and providers of exit financing or acquisition loans for the purchase of distressed companies, whether in bankruptcy, workout negotiations or otherwise.

Real Estate and Commercial Loan Workouts

A large component of our group’s recent practice has been secured lender representation in workouts, bankruptcies and civil litigation. Representative matters include liquidating properties diminished by subprime lending, failed condominium developments, buying and selling assets for hedge and venture capital funds, negotiating real estate loan workouts requiring intercreditor agreements between multiple lenders and collateral trustees to fund reserve accounts, foreclosures, setting up special purpose entities to buy, manage, and sell REO property, seizure of shopping center rents, legal advice to lender funding and the completion of partially constructed projects, coordinating loan extensions and auction of bulk condominiums, prosecuting and defending materialmen and construction liens, litigating homeowner and lender disputes concerning contractual and statutory obligations to homeowner associations per condominium declarations, and prosecuting DIP financing with troubled borrowers in bankruptcy.

Insolvency Litigation

An ever-growing area of the practice is litigation relating to financial restructuring, credit defaults and insolvency. Our lawyers regularly represent clients in a broad range of lawsuits including contract disputes, fraudulent transfers, preferences, sales and dispositions of collateral, zone of insolvency claims, levies and liens, enforcements of judgments, judicial foreclosures and repossessions, and collection actions arising from credit defaults including proceedings against borrowers, guarantors and other responsible parties.

Public Finance Defaults

Working with our robust Public Finance Groups, our insolvency practitioners represent indenture trustees, bondholders, bond insurers, credit enhancers and municipal issuers in matters that arise in tax-exempt and other municipal finance transactions. We have successfully planned and participated in numerous out-of-court and judicial restructurings, including receiverships and Chapter 11 reorganizations, obtaining favorable results for bondholders and other stakeholders. Our practice group is particularly attuned to the remedies that are available when a public finance project underperforms, as well as the special duties required of trustees, issuers and borrowers.

Distressed Company Representation

Balch & Bingham attorneys represent companies in non-judicial workouts and bankruptcy restructurings. As appropriate, the deep resources of the firm give us the depth and expertise to work on the many facets of contemporary business which must be addressed in a successful restructuring such as bank debt, labor and employment, securities, litigation, environmental, sales and acquisitions, tax and real estate.

REPRESENTATIVE CLIENTS

Alabama Bankers Bank
Alabama Power Company
BBVA Compass Bank
Blue Cross and Blue Shield of Alabama
Farm Credit Bank of Texas
Federal Land Bank Association of South Alabama, FLCA
General Growth Properties
LaSalle Bank
Midland Financial Services
Mississippi Power Company
Nexity Bank
Presidential Financial Corporation
Regions Bank
Southern Company
Southern LINC
Superior Bank
Textron Lycoming

Representative Experience

The following national and regional bankruptcy cases are a representative sample of the matters in which the Creditors Rights and Bankruptcy Practice Group has appeared for clients: Goody's Family Clothing (DE), Capri Condominiums (FL), Steve & Barry's (NY), Linens 'n Things (DE), Wellman (NY), SouthEast Waffles (TN), Movie Gallery (VA), Hancock Fabrics (DE), Bally Total Fitness (NY), Winn Dixie (FL), Vesta Insurance Group (AL), Calpine Corp. (NY), K-Mart (IL), Citation Corp. (AL), Enron (NY), Worldcom (NY), Arter & Hadden (OH), Tower Automotive (NY), Oxford Automotive (OH), Sylvest Farms (AL), Hunjon Moulded Products (AL and Canada), G&G Retail (NY), ZB Company, Inc. (FAO Schwartz) (DE), Globe Metallurgical (NY), Terry Manufacturing (AL), Just for Feet (DE), Service Merchandise (TN), Verilink (AL) Dana Corp. (NY), Birch Telecom (DE), Pillowtex (DE), Solutia (NY), Mississippi Chemical (MS), LTV (OH), Johnston Industries (GA), J.A. Jones (NY).

Examples of Recent Engagements:

represent lender as participant in $500,000,000 unsecured credit line concerning Nevada real estate. Adversely impacted by subprime mortgage meltdown.
represent lender in forbearance agreement allowing completion of homes for resale.
represent utility in obtaining adequate assurance of payment.
represent lender in multi lender workout involving beach real estate, formation of collateral pool to fund interest reserves for all lenders.
represent utility in resolving multiple issues arising out of transmission service and interconnection agreements to which debtor was a counterparty.
represent secured lender in successful venue challenge in Florida and recovery of condominium tower in Alabama.
represent investment fund in liquidation of Florida properties in state and bankruptcy courts.
represent venture fund in foreclosure and subsequent sale of condominiums, houses, retail, and commercial spaces.
represent lender in commercial loan workout involving non-bankruptcy orderly liquidation of collateral via auction and private sale.
represent secured lender in the bankruptcy of an international retail company.
defend bank in action brought by Chapter 7 trustee alleging deepening insolvency, aiding and abetting breach of a fiduciary duty, actual and constructive fraud and conspiracy.
represent business owner in defense of bankruptcy trustee's allegations of fraudulent conveyance, alter-ego and commingling.
represent national lenders in multi-bank commercial work-out with Gulf Coast beach developers in which potential loss exceeded $300,000,000.
represent various retail and commercial clients in resolving lease rejection/assumption issues.
represent manufacturer in Chapter 11 case in which DIP asserted tort and warranty claims in excess of $100,000,000.
represent private equity secured lender in liquidation of hotel property though 363 sale.
represent secured lender in bankruptcy of multi-location law firm.
represent secured lender in DIP financing.
represent purchaser of assets from debtors in possession, other distressed companies and trustees.
represent creditors in objections to discharge of individual debtors.
represent creditors in defense of lender liability actions including alleged violations of Truth in Lending Act (TILA) and Fair Debt Collection Practices Act (FDCPA).
represent creditors and indenture trustees in establishing receiverships for public utilities, income producing properties and operating businesses.
represent general contractor in claims against insolvent property owner.
represent parties in construction disputes involving materialman and mechanics' liens.
serve as special bankruptcy counsel for public corporation.
serve as special litigation counsel for Chapter 7 trustees.
represent asset-based lender in commercial litigation involving factoring agreements.
represent construction lenders upon defaults by owner and contractor.
represent floor plan lenders in cases involving out of trust sales.
workouts of various defaulted tax-exempt bond issues.
defense of indenture trustees in litigation arising from defaulted bond issues.