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Bankruptcy, Reorganization & Creditors' Rights

Overview

Parker Poe's Bankruptcy, Reorganization & Creditors' Rights practice group is one of the most sophisticated and experienced in the Southeast. We focus on representation of clients in all phases of commercial bankruptcy cases, state court receiverships, consensual restructurings and loan workouts. Our local, regional and national clients include banks, finance companies, commercial mortgage-backed securities (CMBS) servicers, mortgage and insurance companies, property and equipment lessors and manufacturers.

Chambers USA 2017 gave our team the highest possible ranking, Band 1, for our practice area in North Carolina. Chambers develops its rankings using in-depth interviews and objective research conducted year-round.

Secured Creditor Representation – We routinely represent creditors in Chapter 11 proceedings throughout the United States. Our work regularly includes:

  • Protecting cash collateral
  • Negotiating post-petition financings
  • Obtaining adequate protection and relief from stay orders
  • Contesting financing arrangements and plan confirmations
  • Filing involuntary petitions against insolvent debtors
  • Defending preference and fraudulent conveyance actions
  • Representing governmental taxing authorities in ad valorem tax disputes in bankruptcy

A recent example of our success in this area involved our representation of a national CMBS servicer in connection with approximately $36 million in loans from a borrower with over 50 convenience stores throughout North Carolina and South Carolina. When the borrower filed its Chapter 11 bankruptcy petition, we assisted the client in defeating an insider plan of reorganization and forcing a §363 auction and sale of the stores as going concerns, resulting in a substantially greater return than the plan originally proposed by the debtor.

Debtor Representation – Parker Poe has represented corporations as debtors in Chapter 11 reorganizations and liquidations. Our representation has included one of the largest Chapter 11 bankruptcy actions in the Carolinas – a holding company with multiple domestic and foreign subsidiaries, having assets of $350 million, liabilities exceeding $1.2 billion and more than 15,000 creditors. We also confirmed a prearranged debtor reorganization in which creditors were paid in full after a §363 sale of a division of the company, and our client was able to exit bankruptcy less than four months after filing.

Creditor Committee Representation – Our work includes representation of Committees of Unsecured Creditors. A recent example involved a Chapter 11 debtor which operated in six states in the Southeast and the West. When Parker Poe was retained as committee counsel, estimates of distributions to unsecured creditors ranged between 5 to 8 percent. Parker Poe vigorously represented the committee in pursuing actions in North Carolina and Delaware against multiple third parties, and through these actions we were able to increase the distribution to unsecured creditors to approximately 30 percent.

Purchaser Representation – Parker Poe represents parties in purchasing assets from bankrupt entities. These engagements have included participation in §363 sales, as well as purchases completed in connection with Chapter 11 plan negotiation and confirmation. An example of our work in this area involved the representation of a buying group which acquired, in a merger consummated pursuant to a Chapter 11 plan, a 125-store retail chain operating in 27 states and having an enterprise value of $400 million.

Restructuring and Workouts – We regularly represent lenders in loan restructuring and forbearance arrangements. Our substantial experience includes commercial and industrial secured and unsecured credits, as well as real estate secured financings. A recent engagement involved representing a bank in the restructuring of a multimillion-dollar credit facility for a Carolinas-based manufacturer with operations and collateral located throughout the Southeast.

Representative Experience

Creditor

  • Represented franchise mortgage servicer in connection with Chapter 11 proceeding of convenience store chain with more than 40 stores in North Carolina and South Carolina. Representation included facilitation of multi-store auction with purchase prices totaling in excess of $29 million
  • Represented lender in connection with loans in excess of $30 million secured by multiple real estate leases in Kmart Chapter 11 bankruptcy
  • Represented lender and special servicer in connection with $96 million workout involving more than 150 defaulted restaurant loans secured by properties in 12 states
  • Represented special servicer in connection with $15 million multi-state foreclosure of franchise restaurants
  • Represented lender in connection with foreclosure of apartment properties in North Carolina and South Carolina securing $16 million loan and related Chapter 11 cases of borrower and guarantor
  • Represented CMBS servicer in connection with workout of $116 million loan secured by four internet data facilities in two states
  • Represented CMBS servicer in connection with workout of $113 million loan secured by an office building in Manhattan
  • Represented lender in restructuring $40 million debt of real estate development holding company with facilities in six states
  • Represented servicer in connection with filing of foreclosure, obtaining appointment of receiver and subsequent sale of hotel securing $13 million loan in South Carolina
  • Represented lessor of aircraft in Chapter 11 bankruptcy of regional commuter airline, including the negotiation and documentation of exit financing provided by lessor to the debtor
  • Represented national mortgage lending company in state receivership and foreclosure of multifamily apartment housing developments securing loans of approximately $22 million

Debtor

  • Represented holding company with multiple domestic and international steel manufacturing facilities as Chapter 11 debtor in one of the largest bankruptcy filings in Western District of North Carolina. Representation included all aspects of Chapter 11 practice, including negotiation of $100 million post-petition financing facility
  • Represented manufacturer of textiles with facilities in several Southeastern states as Chapter 11 debtor in Eastern District of North Carolina. Representation included all aspects of Chapter 11 practice, including negotiation of multiple debtor-in-possession financing facilities and competitive auction resulting in $29 million sale of intellectual property rights. Confirmed Chapter 11 plan of reorganization within four months of filing
  • Represented acquirer/plan proponent in the first prepackaged Chapter 11 case in the Western District of North Carolina
  • Represented manufacturer as special employment counsel in Chapter 11 proceeding in the Eastern District of Tennessee
  • Represented national retail chain as special corporate counsel in Chapter 11 proceeding in the District of Delaware

Official Committee of Unsecured Creditors

  • Represented Official Committee of Unsecured Creditors in Chapter 11 bankruptcy of multi-state insurance agency headquartered in South Carolina. Representation included pursuit of substantive consolidation of multiple bankruptcy cases pending in the Western District of North Carolina with the bankruptcy cases of related entities pending in the District of Delaware

Purchaser

  • Represented joint venturer in consortium that purchased Chapter 11 assets of debtor in the District of Delaware for $129 million
  • Represented acquirer of 112-store retail chain in Chapter 11 proceeding in the District of Delaware for a value of $80 million

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Professionals

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