Overview
Honigman’s Bankruptcy and Creditor Rights practice group combines deep insight, practical advice and sophisticated solutions to deftly and creatively navigate clients through the multifaceted, crisis-driven issues that confront financially troubled companies and their key constituencies. We have earned a distinguished reputation for innovative and strategic thinking, business acumen, and judgment. Among other recognition, Honigman’s Restructuring and Insolvency practice is ranked in the top-tier (Band 1) by Chambers USA for Bankruptcy/Restructuring.
While we have one of the nation’s largest and most sophisticated bankruptcy and restructuring practices in the automotive and manufacturing sectors, our Bankruptcy and Creditor Rights attorneys have significant experience across multiple industries, including energy, entertainment, gaming, healthcare, manufacturing, media, real estate, retail, telecommunications, and transportation. We are highly experienced in all forms of restructuring transactions and insolvency proceedings, representing debtors, distressed investors, customers, lenders, creditors, landlords, board members, and potential acquirers, both in and out of court. We also regularly draw upon and benefit from Honigman’s highly recognized lawyers in securities, finance, tax, private equity, real estate, litigation, labor and intellectual property to provide the full suite of service capabilities our clients need for distressed transactions and insolvency-related disputes.
Debtors
Honigman has successfully guided companies, large and small, through formal bankruptcy proceedings. We have represented debtors in some of the largest bankruptcy matters in the State of Michigan including Energy Conversion Devices, Greektown Casino and Capitol Bancorp., in prepackaged restructurings such as the chapter 11 case of Angel Medical, and in cross-border insolvencies like the chapter 15 recognition proceedings of Kraus Carpet. Honigman also represented General Motors Corporation as co-counsel in its historic chapter 11 case with primary responsibility for GM’s myriad supply-chain issues.
When representing distressed companies, we focus on practical, value-add solutions to ensure that our clients achieve their goals. We work directly and strategically with the management team to intimately understand the business and the particular financial and legal challenges putting stress on the company.
Out-of-Court Workouts and Restructurings
Honigman routinely advises companies in distressed or otherwise troubled situations. Ultimately, the proper path toward a successful restructuring, whether in-court or out-of-court, is highly dependent on the challenges at hand. We strive to reach consensus and find an out-of-court solution to restructuring situations whenever possible, and pursue a court-supervised process only when necessary or helpful to achieving our client’s goals. We regularly assist clients in addressing financial distress through out-of-court mechanisms such as creditor compromises, debt conversions, exchange offers, refinancings, strategic mergers and sales, and venture capital financing.
Creditors and Creditors’ Committees
The financial restructuring process involves numerous stakeholders and competing interests. Honigman’s restructuring attorneys have extensive experience in the representation of creditors and creditor constituencies in distressed situations. Honigman routinely represents lenders in secured and unsecured financings for distressed companies, private equity funds and hedge funds in restructuring and insolvency situations, ad hoc and official committees in negotiating with debtors and other stakeholders to restructure financially distressed companies, and landlords, trade vendors and other unsecured creditors in out-of-court workouts and bankruptcies.
Distressed Sales and Acquisitions
Honigman regularly represents purchasers and sellers of assets and businesses in distressed situations, including using Article 9 proceedings and Section 363 of the Bankruptcy Code to effect sales quickly and mitigate liability. We also draw upon the experience of Honigman’s highly recognized M&A practice to provide exemplary service and outstanding value to our clients in a wide variety of distressed transactions.
Bankruptcy & Insolvency Litigation
Honigman’s bankruptcy and insolvency litigation practice involves the representation of debtors, creditors, financial institutions, agents and trustees, directors, owners and purchasers in significant disputes. We have prosecuted and defended very large contested claims, challenged and defended plans of reorganizations and bankruptcy settlements, defended major avoidance actions (including substantial preference and fraudulent transfer claims), protected acquirers from challenges to bankruptcy purchases, litigated executory contract and lease disputes, and resolved a wide variety of other disputes.
We have developed particular expertise, both in and out of bankruptcy, in litigating time-sensitive supply chain disputes, including pricing and breach of contract actions, temporary restraining orders, preliminary injunction proceedings, contract rejection matters, claim-and-delivery actions, and tooling lien disputes.
Troubled Supplier Management
For decades, Honigman has been at the forefront of the art of negotiating agreements between OEMs and their financially troubled suppliers, both inside and outside of formal insolvency or bankruptcy proceedings. We developed and standardized the key agreements that are widely used to stabilize troubled businesses and support the interrelated needs of all constituencies—customers, suppliers, lenders, and equity. Given the just-in-time nature of the automotive and other manufacturing industries, we develop, draft, and negotiate the contractual framework necessary to ensure the continuity of supply and, consequently, business operations.
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Representative Matters
Debtors
- Angel Medical Systems, a medical device startup company, in connection with its prepackaged Chapter 11 restructuring, debt-to-equity conversion and capital raise
- Kraus Carpet Inc. and its debtor affiliates, manufacturers and distributors of hard flooring and carpeting, in connection with their Chapter 15 bankruptcy cases and the sale of substantially all of Kraus’ assets to Q.E.P Co., Inc. and Roberts Company Canada Ltd.
- Capitol Bancorp Ltd., a bank holding company with a network of banks and bank operations in ten states and total consolidated assets of approximately $2 billion, in its Chapter 11 case
- Energy Conversion Devices, Inc., the world’s largest manufacturer of flexible solar laminates, in its Chapter 11 case.
- General Motors Corporation in its historic Chapter 11 case with primary responsibility for all supply-chain issues. After court approval of the Section 363 asset sale to General Motors LLC, represented New GM in connection with hundreds of contract assumption and assignment objections, other supply chain issues and supplier litigation, and issues related to the establishment of the asbestos trusts.
- Greektown Holdings LLC (including Greektown Casino) as special counsel in its Chapter 11 reorganization.
- Priva Technologies in its Chapter 11 case.
Creditors’ Committees
- Official Committee of Unsecured Creditors in the Chapter 11 case of Cherry Growers, Inc.
- Official Committee of Unsecured Creditors in the Chapter 11 case of Treetops Acquisition Company, LLC, a golf and ski resort in northern Michigan.
- Official Committee of Unsecured Creditors in the Chapter 11 case of ISR Group, Incorporated, a company providing a broad range of services in the unmanned vehicle systems (drone) industry.
- Official Committee of Unsecured Creditors in the Chapter 11 case of MEM Investments, LLC
- Official Committee of Unsecured Creditors in the Chapter 11 case of Sturgis Iron & Metal Co., Inc.
- Official Committee of Unsecured Creditors in Chapter 11 case of Edscha North America
- Official Committee of Unsecured Creditors in Chapter 11 case of In re Whyco Finishing Technology, Inc.
Distressed Acquisitions
- Purchaser of interests in a multi-casino joint venture from a financially distressed worldwide gaming, hotel, and resort company.
- DIP lender and plan sponsor in the Chapter 11 case of Oakland Physicians Medical Center (now known as Pontiac General Hospital).
- Purchaser of assets and joint venture interests of restaurant chain in Chapter 11 Case of Olga’s Kitchen, Inc.
- Purchaser in $90 million Boston luxury hotel acquisition under Section 363 of the Bankruptcy Code.
- Purchaser of landmark Detroit skyscraper under Section 363 of the Bankruptcy Code.
- Multiple private equity firms in acquisitions under Section 363 of the Bankruptcy Code and through assignments for the benefit of creditors, receiverships, and Article 9 foreclosure sales.
Bankruptcy and Insolvency Litigation
- General Motors in the Chapter 11 cases of Clark-Cutler-McDermott Company and its debtor affiliates, including in significant litigation brought by the Debtors and the Creditors' Committee.
- General Motors in the Chapter 11 cases of Metavation LLC where the Debtors sought to avoid repayment of funds loaned by GM pursuant to a sale support agreement.
- General Motors in the automotive dealership bankruptcy of Bill Heard Enterprises, Inc., including successfully litigating various issues with the debtor’s floor plan financer.
Troubled Supplier Management
- Significant OEM and Tier 1 customers in connection with the Chapter 11 cases of Takata Corporation, Clark-Cutler-McDermott Company, A123 Systems, Inc., Fisker Automotive Holdings, Inc., Visteon Corporation, Intermet Corporation, Cadence Innovation LLC, PPI Holdings, Inc., Progressive Molded Products Inc., Delphi Corporation, Collins & Aikman Corporation, Dana Corporation, Dura Automotive Systems, Metaldyne Corporation, Tower Automotive, and Lear Corporation, among others.
- Significant OEM and Tier 1 customers in numerous out-of-court workouts, restructurings, refinancings, and distressed sales.
Sponsors, Boards, Special Committees and Independent Directors
- Independent Manger of FirstEnergy Generation, LLC, the owner and operator of multiple fossil generation plants, in its Chapter 11 case.
- Multiple private equity funds in the out-of-court capital restructurings of their portfolio companies.
Landlords
- Various landlords in the bankruptcy cases of Art Van Furniture, LLC, Avenue Stores, LLC, Charlotte Russe Holding, Inc., Claire’s Stores, Inc., Forever 21, Inc., General Wireless Operations, Inc., Granite City Food & Brewery Ltd., Mattress Firm, Inc., Payless Holdings LLC, RadioShack Corporation, RMH Franchise Holdings, Inc., Sears Holding Corporation, Toys “R” Us, Inc., Vitamin World, Inc., The Walking Company Holdings, Inc. and The Wet Seal, LLC, among others.
Other
- Representation of the Detroit Institute of Arts in the City of Detroit’s historic Chapter 9 bankruptcy proceeding, in protection of the museum’s collection appraised at up to $4.6 Billion.