McNutt Law Group's insolvency practice focuses on providing superior legal services to its clients in all phases of insolvency. We represent troubled companies in insolvency workouts outside of bankruptcy and purchasers of assets of troubled and bankrupt entities. We represent creditors' committees, debtors, creditors, post-confirmation entities, and trustees, as well as clients in business transactions, commercial litigation matters and bankruptcy litigation matters. We specialize in the types of litigation that commonly arise in bankruptcy: contested plan confirmations, fraudulent transfer actions, preference actions, relief from stay actions and other contested matters.
- e-Commerce/ Technology
- Restaurants/ Services Industry
- Real Estate Issues/ Commercial Landlord: enant, Acquisition, Foreclosure, and Other Areas
- Patents/ Other Intellectual Property
- Homebuilder Case
Representation of Chapter 7 Debtor
The current collapse in real estate values has propelled many real estate developments into insolvency, with consequences to all participants. By way of example, in this Chapter 7 case we were confronted by a real estate developer with $150 million in personal guaranties on 17 developments. The objective of this bankruptcy proceeding, as well as those to come, will be to put behind developers' debts impossible to pay so that they will be enabled to go forward with new projects.
- In re Galahad Foods, Inc.
Representation of Creditor Roundtable Franchise Corp.
Galahad was an operator of numerous Roundtable Pizza franchise restaurants in the California Central Valley. MLG represented Roundtable Franchise Corp. in successfully opposing the Debtor's Chapter 11 plan, converting the case to Chapter 7, negotiating an interim operating agreement with the Chapter 7 trustee that allowed the restaurants to be operated consistent with the standards of the franchise agreement, and finally purchasing those restaurants as going concerns from the Chapter 7 trustee. The uninterrupted operation of all locations was essential to the process, as was addressing the legal issues such as insurance, labor, lease assumptions and licensing. Negotiating favorable terms of assumed leases was key to the economic success of the acquisition.
- In re Sugar Bowl Ski Corporation
Representation of Chapter 11 Debtor
Sugar Bowl operates a ski resort near Lake Tahoe, California. The firm's lawyers represented Sugar Bowl in a pre-packaged Chapter 11 plan of reorganization designed to facilitate a recapitalization to allow for expansion and improvements to the resort. MLG lawyers worked cooperatively with Sugar Bowl's investors and equity holders in negotiating the terms and structure of the recapitalization, which included complex corporate and real property development issues, in addition to delicate interpersonal issues associated with reorganizing a closely held corporation. MLG lawyers filed Sugar Bowl's Chapter 11 two weeks before the Christmas holidays, traditionally the busiest time of the ski season, and successfully confirmed Sugar Bowl's Chapter 11 plan 60 days later. During the entire process Sugar Bowl operated on a "business-as-usual" basis with all creditors receiving payment in full.
- In re At Home Corp. dba Excite@Home
Representation of Official Committee of Unsecured Creditors followed by representation of post-confirmation entity
At Home Corp. (ATHM) supplied high-speed internet access services to over four million customers of large and mid-size cable companies, including AT&T Broadband, Cox Communications, and Comcast Corp. At Home, through its Excite web-portal, was also a leading provider of internet content and advertising services. At one point, the At Home/ Excite merger was valued at over $7.2 billion and heralded as the largest internet merger in history. MLG represented the Official Committee of Unsecured Creditors in connection with all matters in the Debtor's Chapter 11 case, including opposing the Debtor's proposed sale of its access business to AT&T Corp., the rejection of unprofitable contracts with its cable company customers, the resolution of hundreds of millions of dollars in lease claims and the liquidation of the Debtor's media assets. MLG was instrumental in realizing the remaining going concern value of At Home through negotiation of new service agreements which generated more than $356 million for the estate. MLG was key to resolving complex disputes with lienholders, equipment lessors, and bondholders that ultimately led to confirmation of the Chapter 11 plan less than 12 months after the Debtor filed its petition.
Post-confirmation, MLG represents Hank M. Spacone, the Trustee of the liquidating trust established for the benefit of unsecured trade creditors. In that capacity, MLG resolved over 4,000 claims, supervised the prosecution of avoidance actions and other litigation claims resulting in a dividend to similarly-situated unsecured creditors that was over 200% greater than that estimated during confirmation. To complete the analysis of approximately 4,000 filed and scheduled claims on a timetable, MLG formed a team that included CPA's experienced in claims reconciliation and then used the firm's lawyers to supervise the CPA's and to handle any claims that could not be resolved through accounting reconciliation. Team members were held accountable both for reporting on how their tasks furthered project goals and for completing their tasks on the timetable. The firm utilized both its own litigators and outside litigation counsel to perform due diligence on thousands of At Home files in search of potentially valuable litigation rights, and prosecuted or supervised litigation counsel in the prosecution of over a dozen pieces of litigation that returned millions of dollars to creditors. MLG also supervised intellectual property litigation counsel in a review of At Home's IP portfolio, developed a structure for the sharing of information between separate outside IP litigation firms to limit potential ethics and conflicts issues, and managed litigation to clarify rights in IP litigation pursuant to the confirmed plan. The firm supervised the successful prosecution of preference actions that were pursued on a contingent fee basis, also on a timetable, recovering millions of dollars to the estate.
- In re NorthPoint Communications Group, Inc.
Representation of Creditor SBC Communications, Inc.
NorthPoint (NPNT) was one of the largest providers of DSL services in the United States.
MLG represented affiliates and subsidiaries of SBC Communications, Inc. in contested matters concerning SBC's rights under its interconnection agreements and the treatment of these rights under Section 365 of the Bankruptcy Code, the sale of the Debtor's assets to AT&T Corp., and the assignment of the interconnection agreements to AT&T. As a result, SBC received substantial payment on its claim in a case in which distributions to creditors were insignificant. Resolving these issues required specialized knowledge of the Telecommunications Act as it applies to bankruptcy issues.
- In re Webvan Group, Inc.
Representation of Official Committee of Unsecured Creditors
Webvan (WBVN) was a national online grocer which had developed a proprietary technology platform to handle all aspects of the customer ordering, inventory management, collection, and order fulfillment functions of its business. MLG represented the Official Committee of Unsecured Creditors in all matters related to the Chapter 11 case. Key to the success of the Webvan case was MLG's role in negotiating an incentive-based management compensation scheme dependent in part on management's reduction of the "burn rate" that was otherwise depleting the cash resources of the debtor, including management's ability to control professionals' fees, and reaching certain benchmarks with respect to sales of assets and progress toward confirmation of a Chapter 11 plan. MLG played a significant role in the sale of the Debtor's technology platform, resolving disputes with real and personal property lessors, secured creditors, and WARN Act claimants, and confirming the Chapter 11 plan.
Post-confirmation, MLG represented R. Todd Neilson, the representative of the Reorganized Debtors' estates. In that capacity, MLG is administering a portfolio of over 1,500 claims, assisting the estate representative with the liquidation of certain assets, and the prosecution of avoidance actions and other litigation claims.
- In re iSyndicate
Representation of Official Committee of Unsecured Creditors
iSyndicate was an internet content aggregator. MLG represented the Official Committee of Unsecured Creditors in connection with all matters in the Chapter 11 case, including the sale of its media properties to Yellowbrix, and confirmation of the Chapter 11 plan within 12 months of the petition date. Post-confirmation, MLG represented Hank M. Spacone, the plan administrator. In that capacity, MLG resolved several hundred claims, including the resolution of employee class action claims under the WARN Act after successfully tendering such claims to the Debtor's pre-petition insurance carriers. MLG also prosecuted numerous avoidance actions, including obtaining a fraudulent conveyance judgment in excess of $200,000 against the former CEO's current wife on account of a sexual harassment settlement payment made by the Debtor 91 days prior to the petition.