Bankruptcy and Creditors' Rights

Stone Pigman has substantial experience in all aspects of bankruptcy, financial restructurings and the enforcement of creditors' rights. In bankruptcy, the firm regularly represents creditors, debtors and committees in proceedings throughout Louisiana. The firm's involvement in complex reorganization and liquidation cases has included the prosecution and defense of significant bankruptcy-related claims. Some notable examples include:

• The firm represented a secured lender in the Chapter 11 case of a real estate partnership, successfully defending the client against a lender liability claim of approximately $20 million.
• The firm represented a group of lenders holding an $84 million construction loan mortgage on an office/hotel project in the owner/borrower's Chapter 11 case. After extended litigation, the case was resolved through a consensual plan that included foreclosure of the mortgage.
• The firm filed for Chapter 11 relief on behalf of a publicly traded construction company having annual revenues in excess of $500 million. At the time, the case was believed to be the largest ever filed in Louisiana. During the course of the case, the firm's lawyers successfully resolved over $2 billion in disputed claims against the debtor and successfully prosecuted to judgment or settlement over $20 million of avoidance claims. The bankruptcy case was resolved through a contested confirmation of a plan of reorganization under which the debtor was able to retain over $100 million of tax benefits in the form of a net operating loss carried forward.
• The firm was engaged to defend a subsidiary of a publicly traded financial institution with respect to a preference claim of approximately $1.5 million brought by the trustee of a bankrupt retail chain. The client had provided the warranty service contracts that were sold by the retailer to its customers. After extensive discovery and motion practice, the preference claim was resolved through a favorable settlement.
• The firm defended a publicly traded insurance holding company against an involuntary Chapter 11 petition filed by a group of disgruntled bond holders. The firm was successful in defeating the involuntary petition, and the bankruptcy was dismissed.
• The firm represented a national business finance company in connection with a Chapter 11 case filed by a national lighting service company. After extensive litigation concerning the client's collateral, which consisted of approximately $60 million in payment rights under several thousand lighting service contracts, the case was resolved through confirmation of a consensual plan of reorganization. Since the resolution of the Chapter 11 case, the firm has continued to represent this client in enforcing its rights under many of the lighting service contracts.
• The firm was retained to protect and enforce the rights of a national construction company in connection with the Chapter 11 filing of the owner/developer of a $100 million luxury hotel. Through hard-fought litigation concerning the validity of the client's security interest in the hotel property, this client's claim was resolved by a favorable settlement.
• The firm successfully defended a preference claim exceeding $500,000 brought by the liquidating agent of a regional food store chain against a national advertising company. The matter was settled for $15,000.
• The firm was retained by a national food service company to enforce its rights to payment under two confirmed Chapter 11 plans. In one matter, the client is seeking enforcement of an essential trade creditors payment program under which the client provided approximately $500,000 in services to a Chapter 11 debtor post-petition. In the other matter, the client has sued a reorganized debtor to recover amounts owed under a plan of reorganization. Both matters are still in litigation.

Outside of bankruptcy, firm lawyers regularly represent both debtors and creditors in connection with out-of-court restructurings, and we often provide counseling in transactional matters with respect to actual and potential insolvency issues. We also represent local and national lenders and landlords in the protection and enforcement of their contract rights, including the prosecution of foreclosure and eviction actions in state and federal courts.

In view of the diverse nature of the issues that can arise in all of these areas, the firm utilizes a "team" approach in most engagements. This approach permits the firm, when necessary, to supplement the expertise of its bankruptcy and business litigation lawyers with that of lawyers practicing in other areas, including banking, construction, corporate and securities, environmental, finance, intellectual property, real estate and tax.