Bankruptcy and Creditors' Rights Litigation

Overview

Friedman Kaplan’s bankruptcy and creditors’ rights litigation practice draws upon the insight and excellence of our attorneys to provide our clients with the creative and tenacious representation that has become the hallmark of the firm. We have substantial experience representing and advising corporations, investment funds, officers and directors, liquidators, and bankruptcy trusts and trustees in connection with the many complex issues associated with domestic and foreign insolvency proceedings, including in matters involving claims of fraudulent conveyance, preferential transfer, breach of fiduciary duty, aiding and abetting, lender liability (including in the liability management transaction context), and professional malpractice.

Reflecting the work of the firm overall, Friedman Kaplan’s bankruptcy and creditors’ rights litigation group excels in handling cutting-edge, high-stakes, and exceptionally complex matters. The firm has played an active role in several of the most significant bankruptcy and insolvency proceedings of recent years, such as representing the litigation trustee for a preeminent newspaper and broadcast company which filed for bankruptcy after an $8 billion LBO, two major bondholders in recovering more than $1 billion in defaulted bonds from the government of Argentina, and a group of lenders holding first-lien term loans in the extremely fast-paced and closely watched Serta Simmons bankruptcy case in the Southern District of Texas, including through an expedited trial challenging the validity and legality of the company’s uptier transaction with another group of lenders, among others.

We litigate in multiple venues around the country, including in New York, Texas, Delaware, and New Jersey, where many high-profile bankruptcy filings of recent years have occurred. Indeed, our firm’s Newark, New Jersey office and team of attorneys who have litigated and prosecuted cases in New Jersey for years make Friedman Kaplan a particularly strong choice for clients and co-counsel seeking skilled New Jersey litigation counsel. In addition to our experience litigating in bankruptcy courts, we are known for our creativity in asserting claims in other appropriate venues. For example, Friedman Kaplan brought an innovative lawsuit challenging Del Monte Foods’ 2024 liability management transaction through a Delaware Chancery Court proceeding rather than a traditional breach of contract action. The novel strategy and its success in leading to a speedy resolution were widely covered in the bankruptcy and restructuring press.

Because our firm is relatively free of the conflicts that encumber many large firms, we are able to represent parties on all sides of the bankruptcy table, including debtors, creditors, official and ad hoc committees, litigation trusts, and liquidating trustees. We often represent plaintiffs litigating complex cases against well-financed defendants represented by large firms. The common thread of our work is simple: in the most complicated, high-pressure, high-stakes situations, we leverage our exceptional insight, experience, and creativity to give our clients a critical edge.

Selected Experience

• We represented the largest creditor of PG&E in successfully prosecuting multibillion-dollar insurance subrogation claims, for injuries arising out of the 2017 and 2018 North Bay wildfires, in one of most complex bankruptcy cases in U.S. history.
• Over the course of nearly a decade, we represented two hedge funds pursuing claims against the Republic of Argentina to recover on defaulted bonds. Our clients finalized a settlement with the Republic in which they recovered approximately $1.3 billion. The litigation involved novel issues of contract, creditor and judgment enforcement law, and their intersection with the Foreign Sovereign Immunities Act. 
• We represented U.S. Bank National Association in its capacity as indenture trustee of certain notes issued by Windstream Services, LLC in connection with litigation concerning an alleged default under the indenture. We litigated the matter through trial, with the court ultimately ruling in favor of U.S. Bank on all points and finding that Windstream had in fact breached the indenture.
• We represented the Tribune Company Litigation Trust and indenture trustees for Tribune’s pre-LBO bondholders in prosecuting claims for intentional and constructive fraudulent transfer, breach of fiduciary duty, aiding and abetting, and professional malpractice, among others, against Tribune's former shareholders and financial advisors arising out of Tribune’s 2007 leveraged buyout.
• We represented Caesars Entertainment in defense of federal and chancery court lawsuits brought by various creditor groups alleging that certain transactions violated the terms of bond issuances and the Trust Indenture Act.
• We represented the NWHI Litigation Trust that was established in the Nine West bankruptcy to pursue claims relating to the 2014 transaction in which Nine West’s predecessor was purchased, certain of its businesses were sold off, and its shareholders received more than $1 billion for their shares.
• We represented Wilmington Savings Fund Society, FSB as successor indenture trustee for $250 million of unsecured notes of Nine West Holdings, Inc. in connection with Nine West’s bankruptcy and potential claims arising out of the company's 2014 leveraged buyout and asset sales. 
• We represented a lender to a dialysis provider, DSI Renal, Inc., in defending an action in Delaware bankruptcy court brought by a Chapter 7 trustee alleging over $450 million in claims for fraudulent transfer and aiding and abetting breaches of fiduciary duty in connection with the recapitalization and sale of DSI Renal.
• We represented the collateral agent for a syndicated first-lien term loan facility, including through trial, in an innovative lawsuit challenging Del Monte’s 2024 liability management transaction through a Delaware Chancery Court proceeding rather than a traditional breach of contract action.
• We advised the Chapter 11 Plan Administrator of Cobalt International Energy, Inc. and its debtor affiliates in connection with his retention, the administration of the company’s liquidation, the settlement of class action securities litigation against the company, and claims against the company's insurers.
• We represented Sony Electronics Inc. in defense of $200 million in claims by the trustee of the Circuit City Liquidating Trust alleging preferential transfer, breach of contract, unjust enrichment, and other claims. This matter reached a favorable settlement on the eve of trial.
• We represented a litigation trust formed in the Marvel Entertainment Group bankruptcy to prosecute claims for breach of fiduciary duty against Marvel's former controlling shareholder and affiliated directors in Delaware federal court as well as a successful appeal to the Third Circuit.
• We represented Delphi Corporation in bankruptcy litigation against a group of investment banks and hedge funds alleging breach of a $2.55 billion equity financing commitment.
• We represented an investment fund against 48 subsidiaries of the bankrupt Mexican glass maker Vitro, S.A.B. de C.V. in a complex case involving refusal to honor guarantees on payment of bonds. Despite Vitro’s, and its subsidiaries’, attempt to circumvent their duties and argue that the U.S. courts should extend comity to the Mexican bankruptcy proceeding, the firm prevailed on summary judgment in New York state court, and won an affirmance on appeal. Ultimately, the client reached a favorable global settlement of its claims.