Practice Areas

Bankruptcy

1/26/2017

Susman Godfrey has extensive experience with bankruptcy-related litigation. We represent debtors, creditors and other interested parties in claims in bankruptcy court and bankruptcy-related claims in other venues. Our experience with alternative fee arrangements and, in particular, our preference for contingent fee agreements and other results-based compensation have proven attractive to bankruptcy estates seeking to maximize recovery while minimizing their own up-front expenses and risk.

  • Vitro S.A.B. de C.V. Bankruptcy Litigation. Susman Godfrey represented Vitro S.A.B. de C.V., a multi-billion-dollar Mexican glass manufacturer, in litigation related to its multi-venue international bankruptcy proceedings. This litigation included a major breach of contract and tort action in New York state court against several major investment funds.
  • Lehman Brothers International (Europe) (in administration). Susman Godfrey represented former investment bank, Lehman Brothers International (Europe), in the wake of financial calamities that struck global markets in 2008. In a series of separate negotiations with such entities as Citibank, N.A., Barclays Capital Inc., JPMorgan Chase Bank, N.A., Teacher Retirement System of Texas, and others, the firm helped LBIE recover and repatriate over $1 billion in assets ultimately for the benefit of its creditors. Susman Godfrey was retained by LBIE to oppose the proposed Lehman bankruptcy plan, which gave LBIE less than other, similarly-situated creditors.  LBIE and Lehman reached a global settlement approximately one month after the firm appeared in the case and as the plan approval hearing was approaching.
  • Washington Mutual. Susman Godfrey was retained to represent the Equity Committee in the Washington Mutual bankruptcy. In two multi-week plan-confirmation hearings, Susman Godfrey opposed plans that would have wiped out shareholders. Although both plans were supported by the debtor and by all major creditors, the Court rejected both plans after the trials. Susman Godfrey then negotiated terms of a new plan that distributed over $100 million in value to shareholders, including 90% ownership of the reorganized debtor.
  • Joel I. Sher, Chapter 11 Trustee for TMST, Inc., et al. v. Barclays Capital, Inc. Susman Godfrey represented the Chapter 11 Trustee for Thornburg Mortgage, Inc. (now TMST, Inc.) in a federal court lawsuit against Barclays Capital, Inc., seeking damages for Barclays' seizure of valuable investment-grade mortgage-backed securities that Thornburg posted as collateral to secure repurchase agreements entered into with Barclays.
  • Custom Molders Inc. v. Ford Motor Company.Susman Godfrey was hired by CMI's bankruptcy trustee to evaluate and pursue CMI's patent claims against Ford. Without filing a lawsuit, we tried a one-day mediation-focused evidentiary presentation to North Carolina Bankruptcy Judge Rich Leonard, who then gave the parties a recommendation for settlement. A favorable settlement was reached shortly after Judge Leonard's recommendation.
  • Lyondell Chemical Company Bankruptcy Litigation. Susman Godfrey represented Lyondell Chemical Company as conflicts counsel and special litigation counsel during a Chapter 11 reorganization.  Susman Godfrey obtained an injunction prohibiting note holders and guarantee holders from enforcing guarantees against European non-debtor affiliates, which allowed for a successful and orderly reorganization of the entire organization.  In addition, we represented Lyondell and its affiliates and subsidiaries in a number of adversary proceedings, obtaining settlement recoveries worth tens of millions of dollars to the estate.  Susman Godfrey was an active participant and advisor to the debtors in all phases of the bankruptcy proceedings.
  • Enron Corp v. Citibank, N.A. Susman Godfrey represented the bankruptcy estate of Enron Corp. in litigation against ten banks and investment banks for aiding and abetting breach of fiduciary duty and fraud. Settlements brought more than one billion dollars in value to the Enron estate.
  • Safety-Kleen Litigation. Susman Godfrey represented over ninety banks and lending institutions in connection with their claim against PricewaterhouseCoopers ("PWC"), alleging that the lenders provided a $2.1 billion credit facility to a company called Laidlaw Environmental Services Inc, later known as Safety-Kleen, in reliance on PWC audited and certified financial statements for the company. The case settled for a confidential amount two days before jury selection. 
  • Anicom Litigation. Susman Godfrey represented, under a joint prosecution agreement, the senior creditors of the Anicom bankruptcy estate, the Anicom bankruptcy estate (unsecured creditors), and Anicom shareholder securities class action representative State of Wisconsin Investment Board  (Wisconsin's $80 billion pension fund) in an action against PricewaterhouseCoopers and certain officers and directors of Anicom, Inc.  The case settled favorably for $40 million, with PriceWaterhouseCoopers paying $21.5 million and two individual directors paying $12 million out of their own pockets.
  • Metropolitan Mortgage and Summit Securities Cases. Susman Godfrey was retained by the bankruptcy estates of sister companies Metropolitan Mortgage & Securities and Summit Securities to pursue claims against professionals for actions that led to the financial collapse of the companies. Metropolitan and Summit's joint bankruptcy is the largest in the history of the Eastern District of Washington. Susman Godfrey represented the estate in claims against a number of third parties, including former officers and directors, auditors, and investment firms, and was also retained to defend Metropolitan in a claim brought by one of its subsidiaries.
  • Truvo Bankruptcy Litigation. Susman Godfrey represented the Coordinating Committee of Senior Lenders as conflicts counsel in the Chapter 11 bankruptcy proceedings of certain affiliates of the Truvo Group, an advertising and directories company based in Europe. At the commencement of Truvo's bankruptcy, Susman Godfrey helped obtain a highly unusual order from the bankruptcy court preventing dozens of financial institution creditors from taking any legal action against the company's European operations, which would have destroyed the debtor's best opportunity to reorganize efficiently.
  • Boston Chicken Coverage Dispute. Susman Godfrey represented Ace Bermuda Insurance in a $25 million coverage claim brought by the bankruptcy estate of Boston Chicken in bankruptcy court in Phoenix, Arizona. The case raised novel issues of bankruptcy procedure, international law, and the enforcement of arbitration agreements involving a bankruptcy trustee.
  • Asbestos Coverage Litigation for London Insurance Market.Susman Godfrey has represented the London Insurance Market in litigation regarding asbestos insurance coverage, including bankruptcy adversary proceedings regarding Dresser Industries (a Halliburton subsidiary), Babcock & Wilcox Co. (a McDermott International subsidiary), and Pittsburgh Corning Corp. (a PPG Industries subsidiary).   The firm tried the Babcock & Wilcox matter to the bench for many weeks.  In both the Dresser Industries and the Babcock & Wilcox matters, Susman Godfrey ultimately achieved settlements for the London Market at very large discounts from the exposed policy limits, saving the firm's clients hundreds of millions of dollars.  Pittsburgh Corning ultimately withdrew the bankruptcy plan to which Susman Godfrey's clients were objecting.
  • First Capital Holdings Bankruptcy Litigation.Susman Godfrey was hired by the Creditors' Committee of First Capital Holdings Company to prosecute an adversary proceeding on the debtor's behalf in the Bankruptcy Court for the Central District of California. First Capital was a holding company for life insurance companies in Virginia and California, and its bankruptcy was the second largest insurance company failure at the time. Susman Godfrey pursued breach of fiduciary duty claims against First Capital's former officers and directors and its controlling shareholder, Shearson Lehman Brothers. In addition, we litigated a fraudulent transfer claim against Shearson arising out of Shearson's sale of E.F. Hutton Insurance Group, Inc. to First Capital. This innovative claim was the subject of extensive summary judgment briefing and was tried. After some six weeks of trial, and before the Court ruled, the parties settled.
  • El Paso Electric Co. v. Central and South West Corp.Susman Godfrey successfully represented an electric utility debtor-in-possession, El Paso Electric Company, in its breach of contract claim against Central and South West Corporation, a utility holding company based in Dallas. This case arose out of an uncompleted merger agreement that constituted a key part of El Paso Electric's plan of reorganization. Susman Godfrey successfully prosecuted El Paso's claim to a $35 million payment for CSW's failure to conclude the merger in accordance with the contract. The case was tried to Judge Larry E. Kelley, Chief Bankruptcy Judge for the Western District of Texas.
  • Sunrise Systems, Inc. v. Xerox Corp.The Creditors' Committee of Sunrise Systems, Inc., a computer hardware maker, hired Susman Godfrey to pursue breach of contract and breach of duty of good faith claims against Xerox Corporation. The dispute concerned Xerox's wrongful termination of its contract with Sunrise to develop and manufacture a laptop computer to be marketed by Xerox. After Sunrise's Chapter 11 case was converted to a Chapter 7, Susman Godfrey tried the lawsuit against Xerox in the United States District Court for the Northern District of Texas and obtained a jury verdict of $23.3 million.