Numerous financial institutions ask McNair to represent their interests in bankruptcies, out-of-court restructurings, workouts, asset sales, and foreclosures. We have handled preference actions and other adversary proceedings and our experience representing debtors and liquidating trustees is of great benefit to our creditor clients. If a borrower defaults, we help lenders determine whether to renegotiate the terms of a loan or enforce their rights. When a borrower files for bankruptcy we help financial institutions develop the strategy to protect their collateral. Each situation is unique and receives thoughtful analysis. Our experience representing all constituents provides us with insight which we draw upon to ensure that our clients’ interests are protected and that their claims are paid promptly.

Example of our Services
We represented a major financial institution holding a lien on substantially all assets of a company that filed Chapter 11. The company’s employees filed suit, claiming that the lender was liable for back wages, WARN Act wages and penalties that the company had not paid. The employees also alleged that their claims were secured by a lien on the company’s inventory and receivables under state law, making their claims senior to the lender’s secured claims. In a case of first impression, we successfully argued that the lender was not responsible for payment of back wages or WARN Act wages and that the alleged claims were not entitled to secured status senior in priority to the lender’s secured claims.

Litigation is a necessary and important part of the bankruptcy process, and our lawyers represent clients in all types of adversary proceedings and matters that come before the bankruptcy courts and the appellate courts. We can act on your behalf in fraudulent conveyance and preference adversary proceedings, and are experienced in valuation disputes, claims objections and confirmation issues. Although we are comfortable wearing the trial lawyer’s hat, we also realize that the real goal in bankruptcy is not a courtroom victory – it’s getting paid if you are a creditor, or staying in business if you are a debtor. We take pride in knowing when to urge our clients to continue the fight, and when to settle advantageously and cost-effectively and get on with business.

Example of our Services
We served as co-counsel to an international hospitality company in a bankruptcy litigation case involving the validity of a real property lease. Our client leased a resort hotel from one of the country’s largest pension trusts. The trust sought to avoid the lease by declaring bankruptcy and using the strong arm powers to avoid our client’s unrecorded lease. We argued that this was an improper use of the Bankruptcy Code (as a sword rather than a shield) because the debtor had no creditors and only the debtor’s equity holder would benefit from the lease avoidance. After litigation and multiple appeals on several issues, including bad faith filing, lease avoidance and rejection, and numerous confirmation issues, we successfully defeated the debtor’s attempts to reject our client’s lease.

Example of our Services
We successfully defended multiple defendants in a two week trial of an adversary proceeding brought by a Chapter 7 trustee alleging, among other causes of action, fraudulent conveyance, preference, fraud, conversion, and diversion of corporate opportunity.

As workout strategists, our goal is to understand our clients’ objectives and to recognize the potential outcomes that will best meet their needs. When reorganization is possible, we pursue debt renegotiation on behalf of creditors. For example, our efforts as counsel to the Unsecured Creditors Committee in the Polymer Group bankruptcy case helped the company restructure $600 million in debt and emerge from Chapter 11. We have experience in matters involving complex capital structures, labor unions, ERISA and other employment issues, and we believe our track record in litigating bankruptcy disputes often facilitates a successful out-of-court restructuring.

Example of our Services
We represented a steel manufacturer in its Chapter 11 case which ultimately resulted in the auction sale of a steel mill to a third party which reopened the mill. The Pension Benefit Guaranty Corporation (PBGC) filed claims totaling approximately $84 million against the bankruptcy estate. Our knowledge of ERISA law gathered from our employee benefits practice coupled with previous experience in dealing with this issue in other bankruptcy cases enabled us to successfully negotiate a settlement for approximately half of what the PBGC originally claimed. As a result of the sale of the steel mill, the substantial reduction of the PBGC claims, and the successful and efficient prosecution of preference actions and other litigation, the unsecured creditors received distributions totaling almost three times the amount originally forecasted in the plan and disclosure statement and a large employer in an economically depressed county remained in business.

Trade creditors have their own interests in bankruptcy cases, and McNair represents trade creditors in all aspects of the case, including formation of the unsecured creditors committee, confirmation, the claims allowance process, and defense of preference or other avoidance actions or adversary proceedings. We understand the importance to trade creditors of immediately securing advice when a customer files bankruptcy and of understanding all of the tactics that can advance the interest of unsecured creditors, including reclamation, 503(b)(9) applications, recoupment and setoff.  McNair has also represented an unsecured creditors committee with all aspects of a corporate debtor's reorganization efforts which led to a successful sale of the debtor's vehicle manufacturing business.