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Practice Leader: Daniel M. Litt

The attorneys in Dickstein Shapiro’s Financial Restructuring and Bankruptcy Practice have been active in a number of the most complex bankruptcy cases and restructurings in the country, earning national recognition for their work. We have represented debtors, official and ad hoc creditor and equity committees, individual creditors, and government entities, such as the FDIC, PBGC, and RTC, in nearly every aspect of in-court and out-of-court restructurings.

While we have represented committees in high-stakes multibillion dollar bankruptcy litigations against the world’s largest financial institutions, we also have a track record of success when it comes to delicate, behind-the-scenes restructuring negotiations on behalf of our clients. Because of our experience representing a broad spectrum of stakeholders in a wide array of bankruptcy matters, our attorneys understand, and remain focused on, the central strategic and tactical issues involved in a bankruptcy or restructuring.

To meet the increasingly varied demands of this area of practice, the Financial Restructuring and Bankruptcy Practice is backed by more than 200 litigators and dozens of transactional, regulatory, and government relations professionals. We emphasize a multidisciplinary approach to bankruptcy proceedings—one that goes beyond the courtroom to achieve the best results for our clients.

Our work has been recognized as among the best in the industry by publications such as U.S. News/Best Lawyers, Chambers USA, Benchmark Litigation, Lawdragon, Expert Guides, The Best Lawyers in America, Super Lawyers, and Washingtonian.

Representative Engagements

• GM Avoidance Actions
  The firm is prosecuting a $1.5 billion avoidance action against J.P. Morgan and hundreds of other financial institutions as special counsel to the official creditors’ committee in Chapter 11 proceedings for General Motors Corporation and now on behalf of the General Unsecured Creditors Trust. As counsel to the creditors, Dickstein Shapiro is also litigating a $2.67 billion avoidance action against a consortium of some of the world’s largest hedge funds. The firm is also handling the resolution of hundreds of other disputed claims.
• Reliance Group Holdings, Inc. Representation
  Representing the official unsecured creditors committee, the firm helped senior bond holders, the principal constituency of the committee, to receive an increase in value of more than 2,500 percent. The representation of the Reliance Group Holdings, Inc. committee included litigation and complex negotiations on a variety of complex issues with multiple government, regulatory, and private constituencies, as well as ultimately formulating, negotiating, overcoming objections to, and confirming a plan of reorganization on behalf of the committee. This led to representation of the RGH Liquidating Trust, in which the firm secured hundreds of millions of dollars in assets returned to the creditors and nearly $1 billion in reduced liabilities.
• Refco Bankruptcy Cases
  Representation of Capital Management Select Fund Ltd. in the Refco bankruptcy cases, which was one of its largest securities customers, with a claim in excess of $110 million. The firm represented Capital Management in the stockbroker conversion motion litigation, in a major plan-negotiating party in the moving customer group in the global settlement and Chapter 11 plan process, and as a member of both the post-confirmation plan committee and the post-confirmation litigation trust board that were formed under the plan to manage the asset liquidations and massive third-party litigations. To date, securities customers have recovered more than 98 percent on account of their claims.
• American Home Mortgage Corporation and Bear Stearns High-Grade Structured Credit Strategies Funds Restructuring
  Representation of RBS Greenwich Capital Markets in the restructuring of transactions and recovery of assets arising out of subprime mortgage-backed securities and similar instruments in connection with multiple high-profile U.S. bankruptcy cases and offshore liquidation proceedings. In each case, despite facing hundreds of millions of dollars in exposure, the client emerged with minimal losses—in stark contrast to similarly situated parties. These transactions required the merging of knowledge of U.S. bankruptcy law, including the so-called “safe harbor” provisions, with foreign insolvency law, and an understanding of the complex underlying structured finance transactions.
• Madoff-related Litigation
  Representation of investment managers, hedge funds, and other investors in several significant litigation matters, involving hundreds of millions of dollars of claims, arising out of the collapse of Bernard L. Madoff Investment Securities LLC.
• ERISA Claims
  Representation of Pension Benefit Guaranty Corporation (PBGC) as trustee for retirement plan of debtor, Saint Vincent Catholic Medical Centers, in a $25 million ERISA breach of fiduciary duty claim.
• Borders Group, Inc.
  Representation of 16 affiliated landlords with respect to leases of commercial properties located throughout the United States in the jointly administered bankruptcy cases filed by Borders and its related debtor entities.
• DPH Holdings Chapter 11
  Representation of the plan administrator for DPH Holdings Corporation (formerly known as Delphi Corporation), including overseeing implementation of the company’s confirmed Chapter 11 plan. Also served as plan administrator for DPH Holdings Corporation, including in the prosecution of more than 100 avoidance actions.
• Calpine Corporation Bankruptcy
  Represented Acadia Power Partners in obtaining a favorable resolution of its bankruptcy claims against its joint venture partner Calpine Acadia Holdings, LLC, a Chapter 11 filing affiliate of Calpine Corporation.
• Verestar, Inc.
  Representation of American Tower Corporation in an adversary proceeding in the Chapter 11 case of its subsidiary, Verestar, Inc., and its affiliated debtors, involving preference, fraudulent transfer, and other claims, and in the pursuit of its claims against the debtors.
• Cybercash Bankruptcy
  Obtained a highly unusual outcome for a bankruptcy case in the representation of the official creditors’ committee of CyberCash, Inc., a computer software company. The firm’s representation resulted in a return of 100 percent of the creditors’ claims plus post-petition interest.
• Bayou Group, LLC
  Counsel to a broker-dealer affiliate of one of the world’s largest financial institutions in defending and responding to extensive Bankruptcy Rule 2004 discovery requests and related motions practice, as well as responding to the multimillion dollar fraudulent conveyance litigation that was ultimately filed.
• Caymans Liquidation of SPhinX Companies
  Counsel to the former CEO of the administrator of the SPhinX family of Caymans hedge funds undergoing Caymans liquidation proceedings in federal, state, and Caymans litigation arising out of the collapse of the Refco companies.
• Hawaiian Airlines, Inc.
  Defended the majority shareholder and the former management of Hawaiian Airlines, Inc., in an adversary proceeding arising out of a $100 million tender offer.
• Adelphia Communications Corporation
  Representation of the official equity committee during the Chapter 11 proceedings of Adelphia Communications Corporation.
• Gold & Appel Transfer Liquidation
  Representation of Meade Malone & Co., official liquidator for Gold & Appel Transfer S.A., in an ancillary bankruptcy proceeding filed in the U.S. Bankruptcy Court for the District of Columbia in which the client is seeking to recover substantial assets for the benefit of a company in liquidation proceedings in the British Virgin Islands. The assets recovered include a luxury property in Madrid, Spain, and litigation is ongoing to recover assets and cash for creditors holding more than $40 million in claims.
• Ford Motor Credit Company Representation
  Representation of Ford Motor Credit Company as Virginia defense counsel, which has included representation in a variety of bankruptcy, collection, TILA, FDCPA, FCRA, and other commercial matters over the last five years.
• Allied Capital Corporation
  Representation of Allied Capital Corporation in an action against GC-Sun Holdings, L.P., et al. in Delaware Chancery Court to recover more than $25 million from nine affiliated defendants for breach of fiduciary duties owed to our client as a creditor of an insolvent enterprise. Allied’s claims arose from a complex restructuring and recapitalization transaction that the defendants implemented over a two-year period that was deliberately concealed from Allied. After extensive discovery on a compressed schedule, the case was tried, and after post-trial briefing was completed, a successful settlement was reached.
• WorldCom, Inc. and Cable & Wireless USA, Inc. Bankruptcies
  Representation of APCC Services, Inc. and others in connection with numerous bankruptcy matters, including the WorldCom, Inc. and Cable & Wireless USA, Inc. matters. In the WorldCom case, the firm’s efforts helped the client obtain an allowed claim in the bankruptcy case of more than $45 million. In the Cable & Wireless case, the firm negotiated a special procedure for dealing with an “optional release” provision under the plan of liquidation that allowed the clients to receive additional consideration on account of their allowed claims, which exceeded $4.25 million.
• RCR Plumbing and Mechanical, Inc. (RCR) Chapter 11 Reorganization
  Representation of RCR, one of the four reorganized companies that emerged from Chapter 11 in 2004 in connection with In re American Plumbing & Mechanical, Inc., et al. and the jointly administered bankruptcy case filed in Texas by AMPAM/RCR and two dozen other affiliates in 2003. Based on the firm’s work, RCR obtained a decisive injunctive order in July 2008 from the Bankruptcy Court prohibiting the assertion of 90 general contractor/builders’ claims or any similar claims in the future. This crucial ruling will protect RCR and its future insurance coverage from millions of dollars of potential claims.
• Pixelligent Technologies, LLC
  Representation of Pixelligent through a Chapter 11 reorganization, allowing the company to continue to operate and obtain millions of dollars in government grants while it went. Due to an intractable licensing dispute between Pixelligent and a large publicly traded company concerning rights in critical patents and Pixelligent’s need to modify its capital and debt structure and obtain further R&D financing, the firm filed a Chapter 11 reorganization case for Pixelligent and commenced a complex adversary action in the bankruptcy case to obtain a resolution of the complex patent licensing dispute. As a direct result of that strategy, the firm was able to negotiate a mediated settlement of the licensing dispute, which enabled Pixelligent to continue to operate and assist the debtor in obtaining federal grants under the National Science Foundation’s Small Business Innovative Research grant program and under the U.S. Department of Commerce’s National Institute of Standards and Technologies Advanced Technology Program—despite the fact that Pixelligent was operating in bankruptcy.
• MiddleBrook Pharmaceuticals Bankruptcy
  Representation of the Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of MiddleBrook Pharmaceuticals, Inc., which has resulted in a 100 percent plus-interest recovery to unsecured creditors. The case, which included a Section 363 sale of assets, proceeding quickly due in large part to the efforts of the committee. The committee also assisted in addressing disputes among other parties in interest and aided in the formation and terms of a post confirmation trust.
• Columbia Hospital for Women Sale and Chapter 11 Filing
  Representation of the Columbia Hospital for Women in its sale and conversion to residential housing, as well as in its subsequent Chapter 11 filing in which a successful Chapter 11 plan of liquidation was confirmed in nine months. The plan provided for payments to former hospital employees and other administrative creditors despite the fact that the remaining assets of the hospital were fully encumbered.
• Lehman Brothers Bankruptcy
  Representation of several multimillion dollar claim holders with positions at various Lehman entities, including Lehman Brothers, Inc.; Lehman Brothers Holdings, Inc.; Lehman Brothers (Europe); and Lehman Brothers Treasury Co., B.V.
• Metropolitan Mortgage & Securities Co., Inc. and Summit Securities, Inc. Settlements
  Representation of Western United Life Assurance Company in connection with negotiating and drafting global settlements involving complex federal income-tax treatment, tax refund, contract, and other claims disputes with the Metropolitan and Summit debtors, their numerous affiliates, and their post-confirmation trusts.
• Touch America and Velocita Corp Bankruptcies
  Representations of AT&T Corp. as the largest non-bank creditor owed in excess of $100 million and $150 million, respectively, in two complex telecommunications bankruptcy cases. The firm’s representation included AT&T’s purchase of substantially all of each debtor’s assets having a book value in excess of $700 million and the comprehensive settlement of all claims under a confirmed Chapter 11 plan in one case, and as a stalking horse bidder for assets having a book value in excess of $800 million preconfirmation in the other case (along with a series of post-closing settlements).
• FURSA Alternative Strategies LLC
  Representation of investors seeking to recover assets in the FURSA offshore and domestic funds.