Bankruptcy Litigation

Defending client in an unprecedented fraudulent transfer litigation by the estate of Allied Systems Holdings. The estate seeks to claw back from the trust and other investors in a Yucaipa private equity fund, hundreds of millions of distributions from the fund as fraudulent transfers, under the theory that since the Yucaipa fund was rendered insolvent by a multimillion dollar judgment rendered against the fund, its disbursements to investors leading up to the judgment were fraudulent.

Represented a group of secured lenders in the first lien debt of Texas Competitive Electric Holdings LLC (TCEH), a subsidiary of Energy Future Holdings (EFH) cases in a billion dollar intercreditor dispute. We won dismissal with prejudice of a lawsuit by another group of secured lenders. The decision was affirmed by both the District Court of Delaware and the Third Circuit after oral argument.

O’Melveny served as lead counsel for Brazos Electric Power Cooperative, securing confirmation of its $2.1 billion chapter 11 plan following catastrophic Winter Storm Uri in Texas. O’Melveny helped Brazos secure $350 million in DIP financing, successfully contested ERCOT's $2.1 billion proof of claim, and achieved numerous settlements through mediation.  The positive outcome has far-reaching implications on the interplay between state laws and their authority over electric cooperatives.

Represented clients in litigation against Avianca Holdings S.A. to successfully secure payment of over US$4 million in post-petition lease obligations for aircraft lease initiator fees owed to our clients. The bankruptcy court’s published opinion has a substantial impact on aircraft procurement and treatment of post-petition lease obligations in bankruptcy.

Secured significant victories for insurers in the settlement agreement of the Boy Scouts of America's chapter 11 filing – one of the country's most prominent and controversial bankruptcy cases.

As counsel for the Puerto Rico Fiscal Agency and Financial Advisory Authority, we successfully opposed a creditor’s suit before the US Supreme Court alleging that President Obama violated the Constitution’s Appointments Clause in making appointments to Puerto Rico’s financial oversight board. The case threatened to nullify much of the work the board had done to help restructure debt and bring about other reforms.

Represented clients in chapter 11 case in a claim asserted by a liquidating trustee created by the chapter 11 plan. After a successful mediation before a complaint was even filed, the case was resolved for no payment by the directors, and the compromise was completely funded by insurers.

Represented client in a breach of fiduciary and fraudulent transfer litigation in the Southern District of New York Bankruptcy Court brought by Sears’ estate. We helped guide the former director through a complex mediation and helped secure a settlement of the case.

Represented client as DIP lender to Appvion Paper in its chapter 11 case. When Appvion’s business declined while in chapter 11, we helped Franklin step in as a stalking horse bidder to acquire Appvion’s assets and stave off a liquidation. Two minority DIP lenders sued Franklin, arguing that the purchase violated their rights as DIP lenders. After successfully keeping the lawsuit in bankruptcy court over their attempts to litigate the case in state court, we negotiated favorable settlements with both lenders.

Representing client and former directors of the New York-based supermarket chain, Tops, in a significant fraudulent transfer litigation against them by Tops’ estate. The complaint alleges that dividends totaling US$376 million that Tops issued between 2009 and 2013 were fraudulent transfers and illegal dividends.

Helped Hyundai Steel resolve a yearslong dispute with a debtor that defaulted on notes held by Hyundai. After the debtor was forced to sell collateral in a bankruptcy sale, the proceeds were used to satisfy a substantial portion of the debt owed to Hyundai—and the parties agreed to drop all claims against one another.