Bankruptcy litigation requires keen judgment and the ability to find solutions in an efficient manner. Olshan’s bankruptcy litigation attorneys, in collaboration with the firm’s Bankruptcy & Financial Restructuring Group, combine in-depth knowledge of bankruptcy law and procedure with extensive trial, mediation, and negotiation experience to obtain favorable resolutions for our clients.
We have substantial experience representing all of the primary constituencies in the bankruptcy process, including debtors, creditors, trustees and other key stakeholders.
On their behalf, we litigate and try adversary proceedings, remove non-core matters from bankruptcy to the District Court, appeal adverse bankruptcy decisions to the District Court, and prosecute and defend preference and fraudulent transfer actions. We regularly handle disputes over cash collateral, advise clients on debtor-in-possession financings, challenge automatic stays, and litigate successor liability, constructive trust, alter ego and lender liability. Additionally, we work with the Bankruptcy & Financial Restructuring Group to protect our clients’ interests in Section 363 sales, plan confirmations and corporate governance and securities issues.
Bankruptcy Litigation Challenges
Bankruptcy litigation has several challenging and distinctive characteristics. Understanding and knowing how to address them are key to our efforts to achieve our clients’ goals.
Bankruptcy proceedings unfold fast. Due to the often high financial stakes involved and the extraordinary protection bankruptcy laws provide to a debtor, bankruptcy work often must be expedited. Our litigation attorneys have the depth, skill, and experience necessary to complete complex discovery and prepare the case for argument or trial in months or even weeks if necessary.
Bankruptcy court rules and appellate procedures are esoteric. We have the in-depth knowledge to navigate these rules and procedures, enabling us to work more efficiently and effectively on our clients’ behalf.
There is a profound interplay between litigation and transactional strategies. Bankruptcy litigation is often just one part of an overall plan of restructuring or disposition of assets. Our bankruptcy litigators work seamlessly with the Bankruptcy & Financial Restructuring Group to develop an overall strategy and align both litigation and bankruptcy administration efforts in pursuit of the clients’ goals.
- Represented two Japanese clients, publicly traded on the Tokyo Stock Exchange, that own a famous children’s television and gaming brand, Yu-Gi-Oh!, against a publicly traded licensee that became a debtor in bankruptcy. We prosecuted claims for breach of exclusive licensing agreements for U.S. and European rights and sought expedited confirmation of termination. In less than three months, we undertook a large collection and production of a foreign-language ESI in a foreign country, battled to obtain and review the adversaries’ sizeable production, conducted 16 depositions, and prepared three experts in advance of a month-long trial. We continue to protect our clients’ interests in the litigation and bankruptcy process to ensure the license is placed in favorable hands.
- Representing the “Responsible Person” for the estate of a New York-based apparel company holding various clothing licenses, including Rocawear, in adversary proceedings against former members and other insiders, including members of the Laurita family from the Real Housewives of New Jersey. At issue were breaches of fiduciary duty and corporate waste, and claims against a new licensee for aiding and abetting breaches of fiduciary duty and assisting former members in absconding with the company’s last corporate assets. Working with a forensic accountant, we analyzed corporate records to trace the misappropriation by corporate insiders of millions of dollars for personal use. We also identified a series of seven-figure payments to former members by the new licensee that were never reported to the Bankruptcy Court. Discovery is ongoing and has unearthed numerous incriminating documents among the hundreds of thousands of pages of case documents.
- Represented 17 petitioning creditors holding claims in excess of $20 million in the aggregate in a contested involuntary bankruptcy petition under Chapter 7. Cdx is the holder of several key patents involving cancer marking, detection and screening. Our bankruptcy litigation attorneys, along with attorneys from our Bankruptcy & Financial Restructuring Group, collaborated to prepare and conduct an Article 9 sale of secured assets, and then drafted and filed an Involuntary Bankruptcy Petition. We also represented the clients in related court proceedings in New York Supreme Court, and successfully defeated the Debtor's multiple efforts to obtain an Order staying the Article 9 sale. We engaged in expedited discovery in the involuntary bankruptcy proceeding, involving the exchange of extensive discovery, and conducted numerous depositions in a 90-day period to prepare the case for trial. Our proactive litigation strategy successfully resulted in the Debtor agreeing to a debt restructuring on favorable terms.
- Represented the debtor, Jennifer Convertibles, owner of the largest group of sofabed specialty retail stores and leather specialty retail stores in the United States, as well as six big-box, full-line furniture stores operated under the Ashley Furniture HomeStore brand pursuant to license agreements from Ashley Furniture Industries, Inc., in successfully emerging from bankruptcy in less than six months. During the course of the bankruptcy, our bankruptcy and bankruptcy litigation attorneys engaged in adversarial proceedings and a contested confirmation hearing, in which Ashley Furniture opposed both the assumption of its trademark license agreements under the Debtor’s Chapter 11 plan and the confirmation of the plan. After conducting expedited discovery and depositions, and after a plenary confirmation hearing, the Bankruptcy Court overruled Ashley Furniture's objection and ruled in favor of Jennifer Convertibles, allowing Jennifer to assume the Ashley Furniture license agreements without Ashley Furniture's consent. Our proactive litigation and bankruptcy strategy successfully allowed Jennifer to emerge from bankruptcy, preserving the brand names of Jennifer Convertibles and Ashley HomeStores, and saving more than 400 jobs.
- June 19, 2014