Restructuring & Bankruptcy

Restructuring & Bankruptcy


Bankruptcy Chapter 11 Trustee – Bankruptcy & Sale of 4778 Broadway

Represented Donald F. Conway, the Bankruptcy Chapter 11 Trustee, in the sale of 4778 Broadway, in the Inwood section of Manhattan, to affiliates of the Housing Development Partnership Corporation and Maddd Equities, for 12.3 million, which was authorized by the Bankruptcy Court. Herrick provided strategic advice and counsel in marketing the site, analyzing potential zoning issues, environmental issues and transactional services.

Lehman Brothers

Represented a defendant in an adversary proceeding alleging breach of warranties in the sale of mortgage loans to a debtor.

Hancock Fabrics

Represented a vendor in connection with an adversary proceeding regarding ownership of goods shipped to the debtor.

Fresh Finatic

Representing a landlord in a Chapter 11 case of an organic grocery store and an adversary defendant.   

IRS Realty LLC and ISRS Realty LLC

Representing a bank as mortgage lender in Chapter 11 cases involving commercial real estate in Westchester County.


Representing a lender in a foreclosure action on a condominium project in Brooklyn. 

Debtor in Complex Commercial Real Estate Bankruptcy

Represented the debtor in a complex bankruptcy involving a closely held corporation whose main asset, a valuable Manhattan commercial property, had been placed under receivership prior to the chapter 11 filing. Our court confirmed reorganization plan resolved all disputes with shareholders and included a new $16.5 million mortgage loan used to satisfy all creditors.

Coyne International Enterprises Corp. – Restructuring

Represented Coyne International Enterprises Corp., a leading U.S. commercial laundry service company with nine plants and 15 service centers in 23 states, in a successful auction of its business operations to three industrial laundry companies as part of its Chapter 11 proceedings. The $49.8 million total sale value from the three buyers – Cintas Corporation, Prudential Overall Supply Company and Clean Uniforms and More! – represented a more than 50-percent premium on starting auction bids.

Intelsat Corporation – 11th Circuit Victory in Fraudulent Conveyance Litigation

Represented Intelsat in its victory in the 11th Circuit, capping a 7-year litigation during which Herrick's arguments on behalf of Intelsat were upheld at every step. The trustee of the PSN USA Liquidating Trust originally sought to recover more than $7 million in disputed payments. During the discovery phase of the case, Herrick established that approximately $4 million of the payments were indisputably valid, leading the trustee to drop that portion of his claim. As to the remaining $3 million, the 11th Circuit's decision confirmed the decisions of the bankruptcy court and the district court that the payments to Intelsat could not be clawed back. 

Winstar Communications Trustee – Bankruptcy Appeal

Represented the Trustee for Winstar Communications in an adversarial proceeding asserting claims of insider/voidable preference, equitable subordination and breach of contract, against Lucent Technologies. After winning at the bankruptcy court level following a one month trial and an initial appeal to the US District Court, we successfully argued to the US Third Circuit Court of Appeals in a case then valued at about $340 million. The Third Circuit affirmed the courts below and found that Lucent was an insider of Winstar. In so ruling, the court also upheld the Trustee's arguments regarding earmarking, new value, core versus non-core jurisdiction, right to jury trial and equitable subordination. The American Bankruptcy Institute Journal, in its April 2009 issue, featured the Third Circuit decision and wrote that the case “opens an entirely new and extensive arena in bankruptcy-preference litigation that may cause profound changes in both preference-risk assessments and creditor behavior.”

Red Rock Services Trustee – Appellate Victory in Bankruptcy Litigation

Herrick secured an appellate victory for the chapter 7 trustee of bankrupt demolition subcontractor Red Rock Services, affirming a judgment of almost $1 million won in a bankruptcy adversary proceeding in the Eastern District of Pennsylvania. On behalf of the trustee, Herrick sued a general contractor for breach of its obligations under subcontracts with Red Rock in a pair of multimillion dollar construction projects in Baltimore and Boston. After eight days of trial, the trustee was awarded a judgment of almost $1 million, including attorneys' fees. Herrick defended the judgment on appeal to the district court, where it was affirmed, and went on to successfully defend the ruling on the defendant’s second appeal to the Third Circuit, which affirmed the judgments of the bankruptcy court and district court in their entirety.

Bridge Lender – Real Estate Debtor Bankruptcy

Represented the bridge lender in a single asset real estate debtor case in which Herrick successfully won default rate interest of 24% during the pendency of the debtor's chapter 11 case, where the non-default interest was 12% and the only default asserted was the filing of the debtor's bankruptcy case. Herrick also successfully defeated the debtor's reorganization plan that contemplated a cramdown of the client's mortgage debt, ultimately leading to a consensual chapter 11 plan in which the luxury high-rise condominium in Williamsburg securing the mortgage was transferred to our client.

Ultra Stores – Successful Chapter 11 Plan

Represented Ultra Stores—a 200-store jewelry chain—in its recapitalization through an expedited Chapter 11 plan, guiding the company from filing to confirmation in less than four months. We negotiated first lien emergence financing with an institutional lender and a debt-for-equity swap with the second lien lender and the trade creditors. At the same time, management was able to retain 26% ownership in the company.

Fred Leighton – Jeweler to the Stars

Debtors' counsel for Fred Leighton LLC, famous “Jeweler to the Stars,” and related companies in their Chapter 11 bankruptcy cases. Fred Leighton’s collection is widely recognized as the world's most prestigious collection of rare and historic jewels.

Consumer Products Manufacturer – All Claims Dismissed in Bankruptcy Adversary Proceeding

Successfully defended a multinational consumer products company in a New York federal bankruptcy action filed by a public relations and marketing firm asserting breach of contract, quantum meruit and promissory estoppel claims stemming from the termination of service agreements between the parties. Herrick obtained pre-trial rulings denying the plaintiff’s motion for summary judgment on the pleadings and dismissing a claim for defamation by inference. Following a bench trial on the merits, the remaining 12 claims against our client were dismissed in a judgment that also awarded substantial damages on our client’s counterclaim.

Winstar Communications Trustee – Bankruptcy

Represented the Trustee for Winstar Communications in its bankruptcy case against Lucent Technologies. Following a three month bench trial, the Delaware Bankruptcy Court awarded the Trustee judgment on its bankruptcy and breach of contract claims against Lucent, finding Lucent to be an insider of Winstar. The Court also found that a $188 million payment made four months before Winstar's bankruptcy was held to be a voidable preference to be repaid by Lucent to Winstar.

Hard Money Lender – Guccione Loan Default

Representation of a lender in collecting on a defaulted loan made to former Penthouse publisher Robert Guccione and his companies. Over a five-year period, the lender foreclosed on four properties in New York and New Jersey and realized additional funds from the sale of Guccione's world-class art collection. Ultimately, the client collected over $35 million on the loan and was substantially paid in full.

The Fuller Brush Company, Inc. – Successful Chapter 11 Reorganization – Post Confirmation Liquidating Trust

Representation of the jointly-administered chapter 11 bankruptcy cases of The Fuller Brush Company, Inc. (best known for the "Fuller Brush Man," the ubiquitous salesman that went door-to-door selling Fuller Brush custom brush and housecleaning products) and its corporate parent, CPAC, Inc. Guided the Debtors from their voluntary petitions, to a sale of substantially all of the assets of Fuller Brush, through confirmation of their joint chapter 11 plan. The sale of Fuller Brush's non-consumer business assets to a local business conglomerate in Great Bend, Kansas allowed the operations in the 600,000 square foot facility to continue, with the company's over 180 employees remaining in place.

Home Heating Oil Distributor Acquisition

Represented Bondee Enterprises Inc. in its acquisition of the assets of Mina's Fuel Oil Co., Inc. and Big City Petroleum Transport, Inc., New York based distributors of home heating oil and service.

Venture Capital Firm – DIP Financing

Representation of a mid-sized venture capital firm in connection with a secured credit facility to a debtor-in-possession in a Chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Delaware. The debtor/borrower is one of our client's portfolio companies involved in the healthcare sector. In addition to being the DIP lender, our client is also a pre-petition lender to, and holds a majority equity interest in, the debtor.

Major Comic Book Company – Library Acquisition

Represented purchaser of a significant comic book library from a prominent video game company's Chapter 7 Bankruptcy Trustee.

Insurance Company – Restructuring and Loss Remediation

Represented a major insurance company in restructuring and loss remediation regarding credit enhancement exposure to asset-backed securities.

Intelsat – Equity Media Holdings Corp.

Represent Intelsat Corporation in connection with Chapter 11 proceedings of a television station operator. (E.D. Ark.)

Bridgestone Tire – Chrysler LLC

Represented Bridgestone Tire and Colorado dealers in the Chapter 11 proceedings of Chrysler LLC. (S.D.N.Y.)

Intelsat – Tribune Company

Represent Intelsat Corporation in Chapter 11 proceedings of a diversified media company. (D. Del.)

Bridgestone Tire – General Motors Corporation

Represent Bridgestone Tire in the Chapter 11 proceedings of General Motors Corporation. (S.D.N.Y.)

Title Insurer/Secured Lender – Priority Dispute

Representation of a secured lender in its claim to the proceeds of the sale of a borrower's principal asset. The court granted our motion for summary judgment, ruling that our client's claim had priority over competing claims asserted by produce sellers under the Perishable Agricultural Commodities Act. D.M. Rothman Co., Inc. v. Cohen Marketing Int'l, Inc., 2005 U.S. Dist. Lexis 14449, 2005 WL 1690524 (S.D.N.Y. 2005).

Title Underwriters – Island Mortgage Network Chapter 11

Representation of several national title underwriters in connection with the Chapter 11 cases of Island Mortgage Network, Inc. and related litigation in various courts.

HSA Residential Mortg. Services of Texas v. Stewart Title Guaranty Co., 7 A.D.3d 426, 776 N.Y.S.2d 791 (1st Dep't 2004) -- achieved dismissal of $50 million lawsuit brought by warehouse funder based on acts of alleged agent)

In re, Inc., 284 B.R. 181 (E.D.N.Y. 2002)

Countrywide Home Loans, Inc. v. Lafonte, 2003 WL 1389089, 2003 N.Y. Misc. Lexis 127 (Sup. Ct. Nassau County 2003)

In Re 455 CPW Associates – Mortgage/Mechanic’s Lien Priority Dispute

Representation of a title insurance company in its defense of a mortgage lender from Section 22 claims made by a mechanic lienor, in Bankruptcy Court, asserting that its lien took priority over an earlier filed mortgage. The Bankruptcy Court ruled in our client’s favor and both the District Court and the Second Circuit affirmed. (In Re 455 CPW Associates; Herbert Construction v. The Greater New York Savings Bank, 192 B.R. 85 (Bank. S.D.N.Y. 1996), aff. 2000 U.S. App. Lexis 23470 (2d Cir. 2000))

Commercial Bank – Cross-Border Mortgage Dispute

Representation of a commercial bank in connection with a claim by a French entity that it held a commercial mortgage that was senior to our client's $23 million mortgage on a Manhattan hotel. The trial court entered a $242 million judgment of foreclosure in favor of the French entity which, if executed, would have extinguished our client's mortgage lien. On appeal, the Appellate Division reversed the trial court's decision and vacated the foreclosure judgment. We subsequently helped resolve the dispute with our client receiving payment in full.

Money Center Bank – Mortgage Sale

Representation of a money center bank in the sale of a mortgage loan made to a not-for-profit private community hospital.

Special Servicer – Dismissal of Debtor’s Bankruptcy

Representation of a special servicer in having a debtor’s bankruptcy dismissed, with prejudice, in a hotly contested cram-down confirmation proceeding.

DNL Industries LLC – Chapter 11 Proceedings

Represented DNL Industries LLC, an emerging technology company, in its Chapter 11 restructuring.

Bank Leumi – Dismissal of Complaint

Representation of Bank Leumi USA in lawsuit by a trustee for bankrupt jeweler M. Fabrikant & Sons, Inc., who sought to recover approximately $12 million in payments Fabrikant had made to Bank Leumi on account of loans made to Fabrikant prior to the bankruptcy filing. Herrick, together with counsel to several co-defendant financial institutions, successfully argued that the Complaint failed to plead a plausible cause of action for fraudulent transfer or preference recovery. The Bankruptcy Court agreed and ordered the dismissal of the Third Amended Complaint; that order was appealed to the United States District Court (S.D.N.Y.), where Judge Sullivan agreed with the Bankruptcy Court. The plaintiff then sought review by the Second Circuit Court of Appeals. On October 2, 2013, the Second Circuit issued an opinion affirming the dismissal.

Restructuring Advisor – Fraud Claims Related to Sale of Debtor’s Assets

Successful defense of the former restructuring advisor appointed in Winstar Communication's long-since completed Delaware chapter 11 case in a lawsuit filed by plaintiffs who had purchased the debtor's business in a court approved section 363 sale. The plaintiffs asserted various claims against the advisor and other defendants related to losses sustained following the sale. In a joint effort with the restructuring advisor's co-defendants, Herrick defeated the plaintiff's attempt to circumvent the running of the statute of limitations under Delaware law by filing the action in New York state court. We were able to obtain dismissal of the lawsuit once it was removed to Delaware bankruptcy court, and won affirmation of the dismissal in the Delaware District Court. The plaintiffs' appeal to the Third Circuit was subsequently denied.

State Pension Fund – General Growth Properties’ Bankruptcy

Represented a state pension fund in General Growth Properties' bankruptcy in which Herrick successfully argued for additional default interest of over $11 million on client's secured debt where the sole default under the loan documents was the filing of the GGP chapter 11 cases, and the GGP debtors had proposed joint chapter 11 plans that cured and reinstated all secured debt at the non-default rate.

First Lien Lender – Property Owner Bankruptcy

Herrick represented the first lien lender on a $20 million loan secured by a nearly completed, uninhabited 46 unit condominium project. The lender was in the process of foreclosing on the property when the property owner filed a chapter 11 case. Working collaboratively with the mezzanine lender to whom the membership interests of the property owner were pledged, Herrick successfully maintained the receiver in place and forced the debtor to transfer the property to the lender under a chapter 11 plan of reorganization.

Global Advertising Company – $10 Million Avoidance Action

Negotiated a settlement equal to two percent of the original demand on behalf of a global advertising services company in a $10 million avoidance action arising from a subsidiary's involvement in the advertising and branding campaign for the failed Fontainebleau hotel and casino in Las Vegas.

Sports Franchise – Bankruptcy Counterparty

Represented a major league baseball franchise as counterparty to an advertising agreement and suite license agreement with debtor in connection with the chapter 11 bankruptcy cases of Caesars Entertainment Operating Company, Inc. and its affiliated debtors.

Real Estate Investment Firm – Motion to Quash Granted

Herrick successfully quashed a subpoena served on a prominent real estate investment firm by certain defendants in a Southern District of New York bankruptcy proceeding on a fishing expedition seeking information for use in a separate, pending lawsuit unrelated to the bankruptcy. Complying with an extremely tight briefing schedule, Herrick successfully argued the motion to quash - quickly thwarting the defendants' gamesmanship.

Hughes Network Systems – Reorganization

Represented Hughes Network Systems LLC in telecommunications reorganization. (S.D.N.Y.)

Great Atlantic & Pacific Tea Company – Grocery Haulers Inc.

Representing major trade creditor in large supermarket reorganization. (S.D.N.Y.)

ALC Holdings LLC – Skin Care Provider

Represented official unsecured creditors committee of laser skin care provider. (D.Del.)

Intelsat – Sea Launch

Represented Intelsat Corporation in chapter 11 proceedings of satellite launch service provider (D.Del.)

Intelsat – Protostar

Represented Intelsat Corporation as successful purchaser of Protostar I satellite for $210 million in bankruptcy auction (D.Del.)

Intelsat – Bantel, LLC

Represented Intelsat Corporation in chapter 11 proceedings of a satellite telecommunications company (S.D. Fla.).