Robbins Russell Obtains $300 million Judgment In Bet-The-Company Litigation With Windstream

On February 15, 2019, Robbins Russell obtained a dramatic victory for its client, Aurelius Capital Management, in a high-stakes dispute with telecommunications carrier Windstream Services. Aurelius, a large bondholder of Windstream’s, had declared Windstream in default under its bond indenture on account of an impermissible sale-leaseback transaction orchestrated by the company in 2015. Windstream then attempted to cure that default through a series of exchange-and-consent transactions purporting to dilute Aurelius’s holdings and obtain a waiver of the sale-leaseback default. Aurelius and Windstream proceeded to litigate the question whether those exchange and consent transactions were themselves a violation of the bond indenture.

In a sweeping and sharply worded ruling, the United States District Court in Manhattan awarded Aurelius complete relief. Decrying Windstream’s financial maneuvers as “too cute by half,” District Judge Jesse M. Furman agreed with Aurelius that Windstream’s efforts to cure the 2015 default were ineffective. The court held that Aurelius was entitled to a money judgment of $310 million, as well as declaratory and injunctive relief.

Robbins Russell partners Larry Robbins and Bill Trunk led the engagement. They were joined by Brandon Arnold, Wendy Liu, and Jeffrey Kane.

To read the Bloomberg article, click here.