Debtor–Creditor & Bankruptcy Litigation

Over the past several years, we have secured over $5 billion in total creditor recoveries and repeatedly have prevailed in some of the most high-profile and complicated restructuring disputes in the world.

Robbins Russell has extensive experience litigating debtor-creditor and bankruptcy-related disputes at both the trial and the appellate level.  We frequently represent individual creditors, their trustees, ad hoc groups, and creditors’ committees in contract disputes; fraudulent conveyance and voidable preference actions; creditor derivative actions; and intercreditor disputes.

Over the past several years, we have secured over $5 billion in total creditor recoveries and repeatedly have prevailed in some of the most high-profile and complicated restructuring disputes in the world.

We regularly partner, as litigation or conflicts counsel, with corporate and restructuring practices at other law firms, and with foreign counsel prosecuting our clients’ interests in proceedings abroad.  We also provide independent litigation analysis to clients looking for new investment opportunities.

Our recent and notable work in this area includes:

  • We obtained a $310 million judgment for our client, Aurelius Capital, in bet-the-company litigation against telecommunications carrier Windstream Services.  Aurelius, a large Windstream bondholder, alleged that the defendant breached its bond indenture by engaging in an impermissible sale-leaseback transaction.  Following a bench trial, Judge Furman ruled in our client’s favor on every issue.  S. Bank N.A. v. Windstream Servs., LLC, 2019 WL 948120 (S.D.N.Y.).
  • We successfully defended McKinsey & Co., and certain of its affiliates and professionals, from fraud claims made in bankruptcy courts around the country by competitor Jay Alix. Every single claim brought by Alix was rejected, and we successfully defended those decisions on appeal, as well.  See, e.g., Mar-Bow Value Partners, LLC v. McKinsey Recovery & Transformation Servs. U.S., LLC, 469 F. Supp. 3d 505 (E.D. Va. 2020); In re Alpha Nat. Res., Inc., 736 F. App’x 412, 413 (4th Cir. 2018), cert. denied, Mar-Bow Value Partners, LLC v. McKinsey Recovery & Transformation Servs. U.S. LLC, 139 S. Ct. 1601 (2019).
  • We represent General Obligation bondholders of the Commonwealth of Puerto Rico in litigation with the Commonwealth and in related intercreditor disputes. In re: The Financial Oversight and Management Board for Puerto Rico, No. 17-bk-3283 (D.P.R.) (pending).
  • We won an appeal enabling our client, the trustee for Bernard Madoff’s defunct investment firm, to proceed to claw back billions of dollars transferred by Madoff’s foreign feeder funds to overseas investors.  We were then successful in persuading the Supreme Court not to hear the case.  In re Picard, 917 F.3d 85 (2d Cir. 2019), cert. denied, 140 S. Ct. 2824 (2020).
  • We secured a judgment worth more than $380 million for an indenture trustee in a dispute regarding a bond buyback that was litigated in the Southern District of New York and affirmed twice by the Second Circuit.  Chesapeake Energy Corp. v. Bank of New York Mellon, 837 F.3d 136 (2d Cir. 2016).
  • We prevailed in multiple appeals in the Second Circuit and Supreme Court, leading to settlements in excess of $4 billion that resolved fifteen years of litigation on Argentina’s defaulted sovereign debt.  See, e.g.NML Capital, Ltd., et al. v. Republic of Argentina, 727 F.3d 230 (2d Cir. 2013), cert. denied, 134 S. Ct. 2819 (2014).
  • We secured a judgment in excess of $118 million against the Republic of Venezuela for its default on its sovereign bonds.  ACL1 Investments Ltd. v. Bolivarian Republic of Venezuela, No. 19-cv-9014 (S.D.N.Y. Dec. 7, 2019).
  • We secured a judgment in excess of $500 million for the Official Committee of Unsecured Creditors in a fraudulent conveyance action successfully litigated in the United States Bankruptcy Court for the Southern District of Florida and ultimately affirmed on appeal by the Eleventh Circuit.  In re TOUSA, Inc., 680 F.3d 1298 (11th Cir. 2012).
  • We represent Black Diamond, as administrative agent, in litigation challenging Murray Energy’s $2 billion debt-for-debt exchange as violative of the operative credit agreement.  Black Diamond Commercial Finance, LLC v. Murray Energy Corp., et al., Adv. Pro. No. 19-02143 (Bankr. S.D. Ohio) (pending).
  • We were litigation counsel to a debtor challenging certain commercial agreements with a non-debtor affiliate.  The case was stayed in the midst of trial, and the case ultimately settled on terms favorable to our client.  Alta Mesa Holdings, LP, et al. v. Kingfisher Midstream, LLC, et al., Adv. Pro. No. 19-3609 (Bankr. S.D. Tex.).
  • We represented the administrative agent for the $4.3 billion term loan issued by PetSmart. The agent alleged that PetSmart’s transfers of certain assets violated the credit agreement and were fraudulent transfers.  The case settled on favorable terms as discovery was nearing completion.  Argos Holdings Inc. v. Wilmington Trust, Nat’l Ass’n, No. 18-cv-5773 (S.D.N.Y. Apr. 17, 2019).
  • We represent both the litigation trustee and individual noteholders of the Tribune Company in fraudulent transfer and other litigation arising out of the debtor’s failed leveraged buyout. In Re: Tribune Company Fraudulent Conveyance Litigation (S.D.N.Y., 2d Cir., U.S. Sup. Ct.).
  • We represent the ad hoc committee of first-lien noteholders of Mallinckrodt plc in the company’s bankruptcy proceedings. In re Mallinckrodt plc, No. 12522 (Bank. D. Del.).
  • We represented bondholders of OAS in fraudulent-transfer litigation arising out of the debtors’ restructuring of affiliates in Brazil. Our claims were ultimately resolved to our client’s benefit as part of a global restructuring.  Huxley Capital Corp. v. OAS S.A., et al., No. 15-cv-01637, 2015 WL 971722 (S.D.N.Y.)
  • We represented bondholders of Energy Future Holdings (TXU) in derivative breach of fiduciary duty litigation arising out of the debtor’s siphoning of assets between affiliates.  The claims ultimately were resolved, to our client’s benefit, in TXU’s bankruptcy case.  Aurelius Capital Master, Ltd., et al. v. Acosta, et al., No. 13-cv-01173, 2013 WL 1136968 (N.D. Tex.).

Robbins Russell Insights:

Suing Your Sister Investigating Your Mom: Independent Counsel in Bankruptcy, AIRA Journal (2020)

Blocking Or Coercing Bond Transactions: Lessons From Recent Cases, ValueWalk (May 23, 2018)