Herrick’s Restructuring & Finance Litigation Department is comprised of an agile team of accomplished restructuring, litigation and corporate attorneys with decades of experience advising clients in all phases of complex litigation and in and out of court restructurings.
Our clients include private equity and hedge funds, official and ad hoc creditor committees, bondholders and noteholders, mortgage lenders and borrowers, real estate developers, financial institutions, corporate debtors, trustees, independent directors, special investigation committees and foreign representatives.
In addition to serving as primary counsel in a variety of finance litigation and core bankruptcy matters, the team frequently works side-by-side with some of the world’s largest law firms, serving as conflicts or special litigation counsel.
Herrick has been focused on expanding its team in recent years, adding talent from elite law firms at the associate, counsel and partner levels.
Strength in Distressed Real Estate
Combined with Herrick’s powerhouse Real Estate team, our group is uniquely suited to handle distressed real estate situations and disputes. Our seasoned restructuring lawyers have vast experience in all facets of in and out-of-court real estate restructurings and related litigation. We have extensive experience concerning real estate sales in connection with Section 363 of the Bankruptcy Code; confirmed Chapter 11 plans seeking relief from automatic stays to pursue foreclosures; opposing "cram-down" Chapter 11 plans; contesting valuation proceedings; inter-creditor disputes; and other bankruptcy-related litigation.
Areas of Focus
- Corporate Restructuring
- Bankruptcy Litigation
- Corporate Raiding and Restrictive Covenant Litigation
- Complex Contract Disputes
- Official and Ad Hoc Committee Representations
- Cross-Border Litigation and Restructuring
- M&A Litigation
- Section 363 and Plan Sales
- Finance Litigation
- Intercreditor Disputes
- Real Estate Litigation and Workouts
- Valuation Disputes
- Asset Recovery and Fraudulent Conveyance Litigation
Matter Highlights
Representing Marblegate Asset Management LLC (and funds it manages) – the majority lender to Archway Marketing Services, Inc. – and the administrative agent to the Archway credit agreement against claims for breach of credit and security agreements, breach of fiduciary duty, conversion, conspiracy to commit conversion, and aiding and abetting breaches of fiduciary duty, resulting from a $122 million out-of-court restructuring transaction. In January 2019, Herrick successfully appealed, on an emergency basis, the entry of a temporary restraining order preventing restructuring transaction from proceeding. The TRO was vacated and the restructuring was consummated. Since then, Herrick successfully dismissed 13 of the plaintiffs’ 15 causes of action, and has completed extensive fact and expert discovery. Trial court granted, in large part, a motion to dismiss the case. After an appeal that reinstated certain claims but affirmed the dismissal of the fiduciary-related claims against the lenders, the litigation is nearing the end of discovery with a trial scheduled for 2025.
National Financial Partners, Corp. (NFP): Herrick regularly represents NFP, a national insurance brokerage and consulting firm, in connection with a wide range of pre-litigation disputes and litigation.
In re Boston Generating LLC, et al. (S.D.N.Y.): Representing the largest ad hoc group of defendants-appellees in a matter that has been litigated for over a decade involving fraudulent conveyance claims arising from a $2 billion leveraged recapitalization. The Second Circuit affirmed the dismissal of all claims in In re: Boston Generating, LLC. In so doing, the Second Circuit ruled that the Bankruptcy Code’s safe harbor provision for securities contracts payments, 11 U.S.C. § 546(e), applied to the leveraged buyout and pre-empted the plaintiff-appellant-trustee’s state-law fraudulent conveyance claims, which attempted to claw back approximately $708 million from the defendants-appellees.
Co-counsel to a group of minority lenders challenging non-pro rata priming transaction entered into between borrower, majority lenders, and equity sponsor. The legal issues being litigated here (i.e., whether a private roll-up debt exchange qualifies as an “open market” purchase, good faith and fair dealing requirements, and the extent an equity sponsor can claim the economic interest defense to tortious interference claims) are timely topics garnering significant attention in the market. This matter is one of several recent high-profile litigations involving “uptier” exchanges.
In re Sears Holdings Corporation, et al. (S.D.N.Y.): Served as Special Litigation Counsel to the Official Committee of the Unsecured Creditors in the Sears Chapter 11 cases in connection with (i) a high-profile litigation against Sears’ former majority shareholder, former officers and directors, and others asserting fraudulent transfer, breach of fiduciary duty and related claims in connection with prepetition transactions totaling billions of dollars (the “Insider Litigation”) and (ii) investigating potential estate claims and causes of action relating to a 363 sale of intercompany notes and certain credit default swap transactions (the “Investigation”). Both matters have involved complex financial litigation with multiple parties, experts, and numerous counsel. After multiple years of litigation, the parties reached a global settlement, resolving both the Insider Litigation and the Investigation. That settlement, which was approved by the Bankruptcy Court on August 31, 2022, will provide the Debtors’ estates with $180 million in value and resolve other potential liabilities of the estates, allowing the Debtors to achieve administrative solvency and finally reach an effective date for their plan confirmed in October 2019.
Schneider, et al. v. Pine Management, Inc., et al. (N.Y. Sup. Ct.)
Representing LLC property manager and majority LLC members in suit by minority LLC members alleging breach of contract and breach of fiduciary duty claims related to scope of manager’s authority to manage properties owned by LLCs.
Flat Footed LLC in Successful Proxy Campaign to Block Merger Between Two REITs: Represented an investment management firm, Flat Footed LLC, in a successful proxy campaign to block a merger between two distressed REITs. Following a months-long public proxy campaign opposing the proposed merger between Diversified Healthcare Trust and Office Properties Income Trust, the two companies announced their termination of the merger agreement.
International Arbitration Dispute: Successfully defended an international manufacturer against a complex, multi-million-dollar breach of contract claim brought by a U.S. trading company involving the sale of petrochemicals. The case primarily concerned whether a contract was formed under the UN Convention on Contracts for the International Sale of Goods (“the CISG”) or the UCC. The representation included a seven-day trial involving multiple fact and expert witnesses.
In re Envision Healthcare (S.D. Texas): Herrick represented a group of creditors who had their existing debt subordinated to other creditors via an improper amendment to a credit agreement that occurred to facilitate an “uptier” transaction. We represented this client group in both the bankruptcy and a related adversary proceeding that we commenced. A plan of reorganization was approved by the bankruptcy court with terms favorable to our clients. This matter is particularly notable because it involves novel legal issues associated with the timely and growing trend of creditors challenging “uptier” transactions more broadly.
Represented real estate debtor as special litigation counsel. Won motion to dismiss adversary proceeding, which was affirmed on appeal. (S.D.N.Y.)
Representing real estate debtor in Chapter 11 case involving the William Vale Hotel and complex in Brooklyn, NY. The Court confirmed the Chapter 11 plan of reorganization, which provided for a $177 million sale of property, resulting in full payment to all creditors.
In re Urban Commons 2 West LLC (Bankr. SDNY): Representing secured and DIP lenders in the bankruptcy of real estate developer and hotelier, Urban Commons 2 West LLC and certain affiliates (“Urban Commons”), which defaulted on hotel loans during the COVID-19 pandemic and filed for Chapter 11 protection in November 2022. On behalf of its secured lender clients, Herrick has negotiated the post-petition financing, bid procedures, sale milestones, disclosure statement and plan of reorganization, recently securing a critical win on behalf of its clients regarding the treatment of escrowed insurance proceeds as property of the estate in February 2023. This matter is ongoing.