Our litigators also represent creditors in chapter 11 cases. These representations have ranged from litigating claims on behalf of creditors to defending creditors in preference and fraudulent conveyance actions, including claw back claims in alleged Ponzi schemes. Willkie litigators have represented creditors in connection with avoidance claims in large bankruptcies such as Refco and with respect to alleged Ponzi schemes such as The Bennett Funding Group, Petters Company, Inc. and Lancer Partners. Willkie has also represented accounting firms in large bankruptcy cases, such as Wedtech and Magnesium Corporation of America, in which debtors have asserted accounting malpractice claims against their auditors.
Willkie litigators have also represented lenders in chapter 11 cases. For example, in the Delphi Corporation chapter 11 proceedings, our litigators were an integral part of the interdisciplinary Willkie team that assisted a collective of tranche C DIP lenders in acquiring effective control of the DIP facility. Once that control was obtained, Willkie litigators helped persuade the bankruptcy court to permit the collective to submit a $3.75+ billion credit bid to acquire a substantial portion of the Delphi business. The credit bid topped an already signed private deal between Delphi and bidders backed by Delphi's largest customer, General Motors Corporation, and the United States Treasury Department in a bankruptcy court auction that would have returned $.10 to holders of nearly $3 billion of Tranche C DIP claims. Also, in litigation related to the PTS bankruptcy, our litigators represented Black Diamond as a successor syndicated loan agent in obtaining an injunction compelling the predecessor agent (CIT Corporation) to turn over control of a $50 million escrow account, which the predecessor agent had refused to surrender.
In addition, Willkie represented Credit Suisse in an adversary proceeding commenced by the Official Committee of Unse in blocking a plan that would have paid them only cured Creditors in the Champion Enterprises, Inc. chapter 11 proceedings in the Bankruptcy Court for the District of Delaware. In that proceeding, the Committee asserted claims against Credit Suisse and 115 other lenders for hundreds of millions of dollars, alleging that the defendants had implemented a strategy to acquire Champion at a fire sale price and eliminate its debt, leaving the general unsecured creditors with no recovery in its eventual bankruptcy. Taking the lead on behalf of the defendants, Willkie moved to dismiss the complaint. The court granted the motion and dismissed 11 of thirteen counts in the complaint, finding that the defendants had acted as traditional lenders and had taken no action outside the rights granted to them under the loan documents.
Willkie litigators represented Bank of America, N.A., as administrative agent for a syndicate of prepetition lenders holding $3 billion of debt issued to SemGroup (the Agent), a midstream energy and commodity company that filed chapter 11 in the Bankruptcy Court for the District of Delaware. We obtained summary judgment on behalf of the Agent in three separate proceedings brought by Kansas, Texas and Oklahoma oil and gas producers, defeating their claims for priority in substantial assets of the debtors.
Willkie frequently represented trustees of U.K. pension funds and/or the U.K. Pension Protection Fund in connection with claims asserted against U.S. debtors for pension deficits. These chapter 11 cases have included Sea Containers Ltd., Nortel Networks Inc. and The Readers Digest Association, Inc. Willkie is currently representing the Trustee of Nortel Networks U.K. Pension Plan and the Board of the Pension Protection Fund in connection with claims filed in Nortel’s chapter 11 case to recover a pension shortfall of approximately $3 billion. In Sea Containers, Willkie litigators represented the Official Committee of Unsecured Creditors of Sea Containers Services Ltd. (“Services”) in connection with a challenge to a settlement of claims asserted by the trustees of two U.K. pension funds for deficits in pension plans sponsored by Services. After a week long trial, the bankruptcy court approved the settlement over the objections of the Official Committee of Unsecured Creditors of Sea Containers and Sea Containers bondholders.
Willkie litigators have also represented professionals, such as Alix Partners, Miller Buckfire, Loughlin Meghji & Co. and Rothschild, Inc., in connection with their retention, service and compensation as advisors in chapter 11 cases.