K&L Gates has a diverse national and international bankruptcy/insolvency practice serving a broad range of clients. We represent debtors, creditors’ committees, trustees, credit providers, asset purchasers, vendors, landlords, state court receivers and other interested parties. Our clients include companies in manufacturing, health, technology, engineering, publishing, entertainment, construction, the Internet, real estate, banks, institutional lenders, insurance companies, nonprofit organizations and individuals with needs for legal services in restructuring their personal financial affairs.

Our London office is the center of our insolvency practice in the United Kingdom and Europe and our 18 offices in the United States enable K&L Gates to represent our clients economically and efficiently on a national basis.  Together, the combination of our United States, the United Kingdom and our offices in Asia provide K&L Gates with a platform that allows us to represent clients wherever they are confronted with bankruptcy, finance or restructuring issues nationally and internationally.

K&L Gates’ business reorganization, restructuring and bankruptcy group offers creative solutions through combining bankruptcy expertise with additional expertise and experience such as corporate law, asset-based lending, secured transactions, real estate and intellectual property. Because of the group’s collective experience on both the debtor and creditor side of the practice, we are able to understand all sides of a problem and structure creative, informed and practical solutions to our clients’ concerns and provide efficient and economic legal services. Even though K&L Gates bankruptcy practitioners are able to assist clients in strategic planning, documentation, negotiation, litigation and all aspects of any case filed under any state or federal insolvency law in the United States or under the insolvency laws of other countries and, in particular, the United Kingdom, we do not hesitate to call on the collective experience and knowledge of K&L Gates’ other lawyers. By involving lawyers who are technically skilled in other areas, such as health care, the Internet, environmental law, securities law and enforcement, tax, and ERISA, a complete overview beneficial to our clients is obtained and no issue, however minor, is overlooked. Due to our ability to apply these diverse legal skills to analyze, solve and resolve the problems that confront our clients, we can look beyond the immediate issues and see the total picture in order to provide the best legal advice and avoid the repetition of the problem in the future.

This description highlights K&L Gates’ experience in the areas of corporate reorganization, business restructurings and insolvencies, creditor-debtor relationships and bankruptcy. K&L Gates’ objectives in these areas of practice are to achieve positive results for our clients, to protect our clients’ interests and rights both in and out of bankruptcy proceedings on an expeditious and cost-effective basis, to reduce litigation risk and expense wherever possible and, if not possible, to tenaciously represent our clients to achieve the best result. When assisting our clients in these areas, whether they seek to enforce contract rights, recover assets, turn around a troubled company, or sustain a viable business entity, reform its contractual business relationships, or buy assets from or finance a debtor, every effort is made to staff matters only with those persons necessary to achieve the desired result in a cost-effective manner.

K&L Gates prides itself on its responsibility to its clients and to their needs. Every relationship is a personal one to us. We encourage you to review the credentials of our lawyers who practice in this area. Many are well known in their field and regularly write, lecture and, through their various associations, are leaders in the profession.

Business Restructurings and Workouts
K&L Gates represents a wide variety of clients in both formal bankruptcy proceedings and out-of-court business restructurings and workouts. Financially-distressed companies require legal expertise to reorganize with or without the protection of the courts and to realize the maximum value for their assets and the best recovery for their creditors. The issues confronting a company in distress may involve strengthening management, “cleaning up” the balance sheet, abandoning worthless properties, structuring compromises and settlements with creditors or negotiating with lenders for new or restructured financing. Whatever the issues confronting troubled companies, we counsel and formulate strategies with our clients to promote their goals and assist in the solution to the problems. We have had extensive experience in representing real estate owners, developers and contractors, and in other matters relating to debt restructuring and project finance. A substantial amount of our practice involves regular representation of banks and other financial institutions in asset-based lending, secured transactions, subordinated debt financings, participations, and syndications. However, business restructuring and bankruptcy-related issues involve more than just representing a troubled company or its lender. Our practice encompasses representing purchasers, sellers, financing sources, real estate developers, management and advisors in a wide variety of public and private transactions, including leveraged buyouts, cash-out and stock-for-stock mergers, tender-offers, spin-offs, recapitalizations, joint ventures, and strategic investments. Our expertise with all types of corporate reorganizations, joint ventures, partnerships, licensing arrangements, franchises, public and private debt offerings and leveraged transactions allows us to give our clients meaningful and practical advice based on years of experience.

Out-of-Court Restructurings
By way of example, we have completed transactions, out of court, such as the following:

• Represented a publicly-held steel company in restructuring approximately $200 million of senior bank debt and subordinated debentures and recapitalizing various classes of equity.
  
  
• Represented a privately-held bedding manufacturer in restructuring approximately $250 million of senior bank debt and subordinated debt and recapitalizing various classes of equity.
  
  
• Recapitalized a post-Chapter 11 corporation by an exchange of preferred stock for subordinated debt.
  
  
• Represented an Employee Stock Ownership Plan Trustee in connection with financial restructuring of a leading management consulting firm.
  
  
• Represented major real estate co-op converters in the restructuring of in excess of $100 million of debt to more than twelve major banks.
  
  
• Represented European manufacturer and vendor of telecommunications equipment as major creditor in restructure of $500,000,000 of secured and subordinated debt of South American telecommunications company.

Court-Supervised Corporate Reorganizations
For companies seeking court protection, we have successfully consummated plans of reorganization in Chapter 11 for debtors-in-possession:

• Reorganized a manufacturer of gift wrap and other consumer products around its solvent operating subsidiaries, restructuring high-yield debt obligations incurred in a failed leveraged buyout.
  
  
• Reorganized a retail chain of hardware stores in western Pennsylvania.
  
  
• Restructured a major supplier to the steel industry in Chapter 11.
  
  
• Instituted litigation and negotiated settlements with two major secured creditors, which allowed 100% dividend to unsecured creditors and dismissal of a Chapter 11 case.
  
  
• Reorganized a major pharmaceutical company in Chapter 11 in the Southern District of New York.
  
  
• Reorganized a defense industry manufacturer in Chapter 11 in the Northern District of Texas.
  
  
• Reorganized a media barter company in Chapter 11 in the Southern District of New York. 
  
  
• Reorganized an environmental remediation and construction company on Long Island, New York.
  
  
• Reorganized a VOIP telecommunications company in Chapter 11 in the Northern District of Texas.
  
  
• Sold a major manufacturer of metal products through a Chapter 11 reorganization in Delaware.
  
  
• Represented the owner of a wastepaper recycling facility and created the bulk of a $41 million estate through litigation.

Committees
K&L Gates is frequently chosen to represent committees of unsecured creditors, banks and bondholders in Chapter 11 cases.  Among our most recent committee representations are the following: equity security holders in the Wheeling-Pittsburgh Steel Corporation Chapter 11 case; a committee of twelve banks in the Chapter 11 case of In re Heck’s, Inc.; unsecured creditors committee in the Chapter 11 case of the New York Racing Association, Inc.  K&L Gates has a depth of experience in the representation of committees in the grocery and retail sectors, including recent representations of committees in the Brown & Cole Stores, LLC and Larry’s Markets, Inc. Chapter 11 cases.  In connection with its committee representations, K&L Gates has developed significant experience in dealing with rights of creditors under the Perishable Agricultural Commodities Act (“PACA”), and suppliers of goods holding Bankruptcy Code § 503(b)(9) priority rights

Creditor Representations 
In various creditor capacities, K&L Gates has been involved in most of the major Chapter 11 cases that have been filed in recent years.  As a result of such involvement, we have acquired a vast amount of experience and knowledge, which better enables us to serve our clients.  A few of the recent cases in which our lawyers have been involved are: Delphi Corporation, Delta Air Lines, Inc., United Airlines, Dana Corp., Northwest Airlines Corporation., ASARCO LLC, Hawaiian Airlines, Inc., Mirant Corporation, Enron Corp., New York Racing Association, Inc., Harvard Industries, Inc., Imperial Home Décor Group, Montgomery Ward, Bradlee's, Integrated Resources, Maxwell Communication Corp., National Gypsum Company, Allegheny International, Inc., Columbia Gas Transmission, Harnischfefer Credit Corporation, Ponderosa Fibres of Pennsylvania, Sharon Steel Corporation, Texaco, Inc., Video Update, Inc., Lafeyette Paper and Stage Stores.

Financial Institutions
K&L Gates’ diverse base of financial institution clients includes banks, commercial finance corporations, savings and loan and thrift institutions, brokerage firms, mutual funds, insurance companies, investment banks, and venture capital funds.  In addition to the many legal services provided to these clients for their general business purposes, K&L Gates provides highly specialized advice and counsel on the whole panoply of problems arising with troubled borrowers, complex debt issues, syndicated credits, lender liability and asset-based finance.  Specific examples of services that lawyers at K&L Gates have performed for financial institutions are:

Banks and Institutional Lenders 

• Represented a syndicate of 26 banks and their agent in connection with the reorganization of a New York Stock Exchange company and recovered over $200 million in principal and interest for the bank group.
  
  
• Defended a group of twelve banks in the dismissal of lender liability, preference and fraudulent conveyance claims against the banks and in the successful recovery of cash, secured notes and stock for the banks’ claims.
  
  
• Successfully completed lengthy and complex Chapter 11 cases arising out of a failed leveraged buyout, which resulted in a much-publicized Third Circuit decision in favor of the banks.
  
  
• Represented senior secured creditor in the bankruptcy case of the E.F. Felt Co., a commercial avionics repair facility in northern California.
  
  
• Counseled a lender in a global restructuring involving many other bank and insurance company lenders of a borrower, allowing the borrower to obtain new capital financing, restructure the bank debt and avoid bankruptcy.
  
  
• Represented a foreign bank in the Chapter 11 proceedings for one of the largest construction companies in the Delaware bankruptcy court.
  
  
• Negotiated a major restructuring of equity for bank debt on behalf of a publicly-traded natural gas corporation.
  
  
• Represented the holder of an undersecured first mortgage loan in the successful Chapter 11 reorganization of a 288-unit inner city subsidized rental housing development, presenting the prevailing Chapter 11 plan.

Brokerage Firms, Hedge Funds, Distressed Debt, and Mutual Funds

• Provided brokerage firms and mutual funds with advice on how to address troubled credits and investments in derivatives.
  
  
• Represented distressed debt investors in acquiring troubled credit facilities and maximizing recoveries through both out of court restructurings and Chapter 11 reorganizations.
  
  
• Advised brokerage firms and mutual funds concerning applicable law for insolvent municipalities.
  
  
• Represented a group of investors in a failed Connecticut based hedge fund complex that was discovered to be operating as a Ponzi scheme. The firm formed an unofficial committee of investors for the purpose of obtaining appointment of a federal receiver and later, after filing of a Chapter 11 petition by the receiver, represented the official creditors' committee in the bankruptcy case.

Asset Acquisitions
K&L Gates has considerable experience in representing clients in the acquisition of assets from distressed companies, ranging from the acquisition of discrete assets to entire business lines.  A few examples of our experience in asset acquisitions are:

• Represented major information technology provider in the acquisition of the service division assets in the Eastern Airlines and Continental Airlines cases.
  
  
• Represented national asset disposition and consulting firm in acquisition of inventory and leases in retail bankruptcy cases.
  
  
• Represented restaurant franchisor in acquisition of restaurant business and related assets in the Spectrum Restaurant bankruptcy cases.

Insurance Companies and Related Entities

• Advised the Superintendent of Insurance of a major state in connection with claims against a security guard company.
  
  
• Counseled various investors in derivatives in how to deal with declining values and loss.

Other Representations

• Represented various creditors in airline reorganizations involving cash collateral issues, sale and use of heavy equipment and rights of unsecured note holders.
  
  
• Litigated the rights of general and limited partners in major commercial real estate developments.
  
  
• Negotiated the purchase of multi-million dollars of distressed debt in Harvard Industries, Imperial Home Décor Group and other Chapter 11 entities.
  
  
• Represented a public company holding substantial debt in the successful takeover of a major resort on Cape Cod in a Chapter 11 case involving competing plans.
  
  
• Represented a precious metals refinery in the Chapter 11 liquidation of another refinery company in connection with claims to unrefined material and as a member of the creditors’ committee.
  

Lessors
Among our clients are equipment and real estate lessors.  Whether these clients seek to recover their leased assets or simply to protect their positions from eroding in a workout or court-supervised restructuring, we have the knowledge to achieve their objectives.  By way of example, our lawyers have been involved in the following matters:

• Representation of a major equipment lessor in the recovery of its equipment and obtaining lease payments in the Phar-Mor Chapter 11 case.
  
  
• Representation of a major New York-based landlord in connection with obtaining possession of 55 Broad Street in New York City.
  
  
• Representation of an equipment lessor in recovery of leased real estate and paper manufacturing plant in upstate New York.
  
  
• Representation of a Texas-based public company in recovery of real estate rentals and leased shopping center premises in various Chapter 11 cases in Delaware and other jurisdictions.
  
  
• Representation of the owner of a commercial manufacturing facility in Marin County, California in matters relating to the assumption and assignment of its lease.
  

Insurance Company Insolvencies
K&L Gates represents a variety of clients with respect to insolvency proceedings of domestic and foreign insurance companies.  Insurance insolvency proceedings generally take place outside of a federal bankruptcy system and involve statutory receivership in state court, or, in some cases, in the courts in foreign jurisdictions, principally the United Kingdom.  Lawyers in the firm negotiate with domestic and foreign receivers, prosecute claims and litigate objections to claim determinations and domestic insolvencies.  K&L Gates has advised most of its insurance coverage clients on insolvency matters.  The major issues relate to coverage for environmental claims and for asbestos bodily injury and property damage claims.

The K&L Gates London Office
The K&L Gates’ London office is the center of our European restructuring insolvency practice.  The experienced and well-respected team of lawyers in the K&L Gates London office represents debtors and creditors across a wide spectrum of insolvency-related matters and has all of the capabilities of our offices in the United States. 

Our team regularly advises debtors, creditors as well as office-holders from most major accounting firms on all insolvency-related matters, including:

• The restructuring and refinancing of public and private companies and groups of companies;
  
  
• All insolvency procedures and related matters, including antecedent transactions, wrongful trading and distressed business and asset sales;
  
  
• U.S. and European cross-border issues;
  
  
• The responsibilities of overseas parent companies with subsidiaries in the U.K.; and
  
  
• Corporate governance and Sarbanes-Oxley related matters in the U.K. and abroad.

The London office advises the firm’s clients in the financial services and insurance sectors, particularly policyholders on insurance coverage issues with solvent and insolvent issues.

Recent examples of matters undertaken by the London office include:

• Successfully obtaining U.K. administration orders for a group of English, Dutch and Belgian companies pursuant to the EC Insolvency Regulation;
  
  
• Advising the board of an internationally renowned premier hotel group prior to a debt-structuring and sale;
  
  
• Advising the administrators of a group of financial services companies on pension fund shortfalls exceeding £11 million;
  
  
• Advising in connection with a debt to equity conversion and the subsequent sale of a substantial restaurant and gastro pub group;
  
  
• Representing the administrators of a business which traded from all major U.K. airport sites, and which provided an aircraft interiors repair and cleaning service to many well known airlines and national carriers;
  
  
• Acting for policyholders on settlements with Equitas and other London insurers; and
  
  
• Advising providers of insurance coverage to U.S. and other airlines facing Chapter 11 and other proceedings.

Asbestos-Related Bankruptcies
K&L Gates is one of the nation’s premier law firms involved in asbestos-related bankruptcy cases.  From the early bankruptcies of companies like Johns-Manville Corporation and National Gypsum Company to the more recent cases of the subsidiaries of Halliburton Company, and Harbison-Walker Refractories, Inc.,  AC&S Inc.,  Federal-Mogul Corporation, and Asbestos Claims Management Corporation, K&L Gates has been involved in more than a dozen bankruptcy cases that span the entire 21-year history of asbestos-related bankruptcies.  K&L Gates lawyers bring a strategic, interdisciplinary, and integrated approach to asbestos-related bankruptcy cases, combining their experiences in representing debtors, bankruptcy litigation and counseling on asbestos matters, pursuit of insurance coverage for asbestos liabilities, national and regional coordination of the defense of asbestos cases, and transactional, tax and securities counseling relating to the impact of asbestos claims.  K&L Gates has represented a diverse group of clients in the asbestos-related bankruptcies, including the debtors, their creditors, directors, officers, shareholders, parents, subsidiaries, affiliates, asbestos trusts, asbestos claimants, and co-defendants, as well as the defendants in fraudulent conveyance actions.  K&L Gates lawyers have been on the forefront of groundbreaking developments throughout the history of asbestos-related bankruptcies, including, for example:

• In the Pittsburgh Corning bankruptcy proceeding, the use of the Bankruptcy Code by our client, PPG Industries, Inc., has been called “pathbreaking” by the Wall Street Journal.  PPG announced a deal in which approximately one hundred thousand pending and virtually all future asbestos claims against it would be channeled to the asbestos trust created as part of Pittsburgh Corning's bankruptcy reorganization.
  
  
• In the Harbison-Walker Refractories Company bankruptcy case, our client, Dresser Industries, Inc., obtained a temporary restraining order that enjoined the prosecution of more than 200,000 asbestos claims against Dresser.  Dresser's parent company, Halliburton Company, recently announced that it has reached a settlement in principle that, if consummated, will result in a global settlement of all personal injury asbestos and certain other personal injury claims against the company.
  
  
• In the Babcock & Wilcox Company bankruptcy proceeding, our client, the debtor Babcock & Wilcox, was granted summary judgment dismissing the claims brought by the London Market insurers, who had sought to nullify a coverage-in-place agreement that governs hundreds of millions of dollars in unexhausted insurance coverage for asbestos products claims.
  
  
• In the NARCO bankruptcy case, K&L Gates is advising Honeywell Corporation with respect to the use of insurance proceeds to help fund a settlement with the asbestos claimants in the NARCO bankruptcy.
  
  
• K&L Gates is representing Combustion Engineering Inc. and ABB Lummus Global Inc. in connection with their Chapter 11 proceeding.
  
  
• K&L Gates represented DII Industries, LLC and Kellogg Brown & Root, Inc., subsidiaries of Halliburton Company, and certain other affiliates in their Chapter 11 proceedings and the negotiation of their asbestos- and silica-related prepackaged Chapter 11 plan of reorganization.

Professional Activities
Lawyers at K&L Gates are active members of the Business Law Section and the Business Bankruptcy Committee of the American Bar Association and of various local bar associations.

We also participate in numerous bankruptcy, bar and professional organizations, including:

• The American Law Institute
• The American College of Bankruptcy
• The American Bar Foundation
• The American Bankruptcy Institute
• The Commercial Finance Association
• The Commercial Law League
• Turnaround Management Association
• Equipment Leasing Association
• Association of Commercial Finance Attorneys
• The Law Society of England and Wales
• The Association of Business Recovery Professionals (“R3”)
• International Federation of Insolvency Professionals (“Insol”)
• The Loan Markets Association