Business Reorganization & Bankruptcy

The Business Reorganization and Bankruptcy group at HBD is a national leader in its field, and its senior members have successfully represented major positions in some of the most complex and difficult reorganization and bankruptcy cases to have been filed in the last two decades. Our practice encompasses representation of debtors, secured creditors, unsecured creditors and equity interest holders, and statutory committees and informal or ad hoc committees of bondholders or other creditors. We also represent persons or entities in connection with the acquisition of assets of, equity interests in or control of troubled businesses, including corporations.

HBD believes that it offers to its reorganization clients the services of the highest quality professionals with in-depth experience in nearly every type of problem encountered in the reorganization practice. Our collective experience in the field and intimate familiarity with both the law and the practicalities of reorganization cases, both in bankruptcy court and in an out-of-court setting, facilitate insightful evaluation of the range of likely outcomes, sensitivity to the client's business goals, and effective, constructive negotiation.

The following is a representative sample of some of the major cases in which the Business Reorganization and Bankruptcy Group or its principals have been involved during the last few years:

Debtor/Trustee Representation:

• Orange County, California. Lead counsel for the debtor in a chapter 9 case commenced following a $1.7 billion loss in county investment pools and a related cash flow crisis. A Plan of Adjustment that comprehensively resolved the County’s financial problems was confirmed and successfully implemented in approximately 18 months. A senior member of the firm (who joined HBD after the conclusion of the Orange County matter) also acted as lead counsel to the Bondholders’ Committee in the Orange County case.

• The LTV Corporation and affiliates. Special financing and litigation counsel in chapter 11 case for third largest integrated steel manufacturer in the United States.
• Federated Stores, Inc. (f/k/a Campeau Corporation U.S., Inc.) and affiliates. A senior member of the firm acted as lead counsel for U.S. holding companies in connection with financial restructuring of Federated Department Stores, Inc. and Allied Stores Corporation and disposition of Ralphs Grocery Company.
• Komag, Inc. Reorganization counsel for publicly held (NASDAQ) manufacturer of disk media in out-of-court restructuring negotiations and in a chapter 11 case commenced to implement the agreement reached as a result of these negotiations.
• Hawaiian Airlines, Inc. Reorganization counsel for chapter 11 trustee of operating United States flag carrier headquartered in Hawaii.
• WestStar Cinemas, Inc. Lead counsel in chapter 11 reorganization case for owner and operator of the Mann and Festival motion picture theatre circuits, which includes the Mann’s Chinese Theatre.
• Brobeck, Phleger & Harrison LLP. Counsel to chapter 7 trustee appointed in one of the largest law firm failures in United States history.
• Desert Hot Springs, California. Reorganization counsel for first California city to file for relief under chapter 9 of the Bankruptcy Code.
• Liberty House, Inc. Lead counsel in chapter 11 reorganization of the leading department store chain in Hawaii and Guam.
• Strouds, Inc. Lead counsel to 71 store specialty retailer in chapter 11 proceeding.
• Aureal Inc. Lead counsel in chapter 11 case for publicly held (NASDAQ) manufacturer and marketer of personal computer sound components.
• SmarTalk TeleServices, Inc. Lead counsel in chapter 11 case for publicly held (NASDAQ) marketer of prepaid phone cards.
• LA Gear, Inc. Reorganization counsel for debtor in out-of-court restructuring negotiations and in chapter 11 case of publicly held (NYSE) developer and marketer of athletic footwear.
• StorMedia Incorporated. Lead counsel in chapter 11 case for publicly held (NASDAQ) manufacturer of hard disk media.
• Pacific Coin, Inc. Lead counsel for debtor in successful out-of-court restructuring of major pay telephone owner and operator.
• First Capital Holdings Corp. A senior member of the firm acted as lead counsel for the debtor in chapter 11 cases for holding companies for two insolvent insurers. First Capital Life Insurance Co. (California) and Fidelity Bankers Life Insurance Co. (Virginia)
• Tucson Electric Power Company. A senior member of the firm acted as reorganization counsel for out-of-court restructuring of $2.3 billion in debt obligations, lease obligations and preferred stock for NYSE listed utility.
• Equatorial Communications Corporation. A senior member of the firm acted as lead reorganization counsel in connection with out-of-court restructuring of indebtedness including leveraged leases of satellites.
• Evergreen International Aviation, Inc. and affiliates. Reorganization counsel in connection with restructuring of $450 million in secured and unsecured indebtedness.
• Sundance Film Centers, Inc. Counsel for the company in an out-of-court restructuring for privately-held art firm exhibitor.
• Westwood Equities Corp. (f/k/a Ticor). A senior member of the firm acted as lead counsel for out-of-court negotiations with creditors and in subsequent chapter 11 case.
• Factory 2 U Stores, Inc. Bankruptcy counsel to leading West Coast off-price apparel and houseware retailer.
• Opal Concepts, Inc. Chapter 11 counsel to owner and franchisor of retail hair care salons, including the Fantastic Sams, Carlton International, and Jose Eber chains.

Creditor Representation:

• Enron Corp. – Osprey Notes. Counsel to Ad Hoc Committee of holders of $2.4 billion issue of “Osprey Notes” issued by Enron Corporation. Conceived, negotiated, and successfully implemented a global settlement maximizing recovery to noteholders in Enron’s chapter 11 case.
• Sempra Corporation. Counsel for Sempra Corporation and its subsidiaries in connection with chapter 11 reorganization case filed by Pacific Gas & Electric Company and other aspects of the California electric power crisis and Enron Corporation’s chapter 11 cases.
• AES Corporation. Counsel to AES and its subsidiaries in connection with Enron’s chapter 11 cases.
• United Airlines. Counsel for Indenture Trustee and holders of $154 million Special Lease Facilities Revenue Bonds issued by the California Statewide Community Development Authority and payable from rents paid by United Airlines. The firm also represents the Indenture Trustee in litigation commenced by United to “recharacterize” its obligation to pay rent as a general debt obligation.
• Delta Air Lines, Inc. Counsel for funds managed by Franklin Resources, Inc. as bondholder.
• Peregrine Systems, Inc. Counsel for informal committee of bondholders in out-of-court negotiation and counsel for official committee of unsecured creditors of Peregrine Systems, Inc. and Remedy in chapter 11 cases. Peregrine Systems, Inc. is a publicly held (NASDAQ) provider of infrastructure management software.
• Worldcom. Counsel for Official Committee of Unsecured Creditors in connection with allegations raised by certain competitors of Worldcom, including AT&T Corp., SBC Communications, Inc., and Verizon Communications, Inc. in connection with Worldcom’s call routing practices.
• Pacific Gas & Electric Corp. Counsel to “Tranche B Lenders” in connection with restructuring dialog necessitated by downgrading of PGE’s unregulated energy businesses.
• Adelphia Communications Corporation. Counsel to Ad Hoc Committee of Adelphia Communications Corporation Senior Noteholders. The holders of the Senior Notes, which have an aggregate principal amount of approximately $5 billion, constitute the largest class of unsecured creditors in the Adelphia bankruptcy cases.
• Westpoint Stevens, Inc. Counsel for Steering Committee of First Lien Lenders.
• SpectraSite Holdings, Inc. Counsel to informal committee of bondholders and then to official committee of unsecured creditors in chapter 11 proceedings.
• Dade Behring Holdings, Inc. Counsel to noteholder committee in prepackaged chapter 11 plan of reorganization.
• California Power Exchange. Counsel to San Diego Gas & Electric Co., California’s third-largest investor-owned utility, in the California Power Exchange chapter 11 case.
• At Home Corporation. Counsel for senior secured creditor in connection with chapter 11 case for publicly-held (NASDAQ) provider of internet-related services to cable television subscribers and Excite.com internet portal.
• Fruit of the Loom, Inc. Counsel for informal committee of unsecured bondholders in chapter 11 case to NYSE listed clothing manufacturer and marketer.
• NorthPoint Communications Group, Inc. Counsel for chapter 7 trustee and for Ad Hoc Committee of Bondholders in chapter 7 cases pending in the U.S. Bankruptcy Court for the Northern District of California. NorthPoint was a publicly-held (NASDAQ) wholesale DSL provider.
• General Cinemas Corp. Counsel for large unsecured creditor in chapter 11 reorganization case.
• Ritter Ranch Development, L.L.C. Counsel for holder of Mello-Roos bonds secured by property taxes due from developer who has filed chapter 11 reorganization case.
• Packaging Resources, Inc. Counsel for senior bondholders in connection with out-of-court restructuring of indebtedness and sale of company.
• RBX, Inc. Counsel for petitioner/creditors and subsequently for Official Committee of Unsecured Creditors in case for privately held manufacturer of specialty rubber products.
• Kinrose Gold Corp. Represented Franklin Templeton in out-of-court restructuring negotiations. The threat of litigation by HBD resulted in a favorable settlement involving the issuance of securities listed on the Toronto Stock Exchange and accompanying registration rights in the United States.
• Oglebay-Norton Corp. Counsel to senior secured bondholders in chapter 11 case and related adversary proceeding commenced to enforce subordination provisions.
• San Diego Gas & Electric. Counsel to San Diego Gas & Electric in the recently confirmed consensual chapter 11 plan in In re California Power Exchange in the Central District of California.
• Sizzler Restaurants International. A senior member of the firm served as creditors committee counsel in chapter 11 case of prominent restaurant chain.

Representation of Equity Interests:

• Olympia & York Developments Limited and affiliates. A senior member of the firm acted as lead counsel for the Reichmann family, in connection with the financial restructuring of Olympia & York Developments Limited and numerous subsidiaries and affiliated partnerships. This matter included formal insolvency proceedings in Canada, the United Kingdom and the United States as well as numerous out-of-court restructurings for particular U.S. holdings.
• Kinross Gold Corp. Represented Franklin Templeton in out-of-court restructuring negotiations. The threat of litigation by HBD resulted in a favorable settlement involving the issuance of securities listed on the Toronto Stock Exchange and accompanying registration rights in the United States.

Acquisition of Troubled Businesses:

• Dome Petroleum Limited. A senior member of the firm acted as lead reorganization counsel to Amoco Corporation in connection with its acquisition of Dome Petroleum Limited. The acquisition and related restructuring were consummated in insolvency under Canada’s companies’ Creditors’ Arrangement Act and Business Corporations Act.
• Hooked on Phonics. Counsel for investor group in asset acquisition.
• Magellan Health Services, Inc. Counsel to Onex Corporation in connection with its participation in a plan of reorganization pursuant to which Onex purchased an equity interest in and acquired control of the reorganized company.

Complex Litigation

Patent and Technology