Global Restructuring Review - Cross-border restructuring and insolvency legal news, features and events

GRR 100 2018

Morrison & Foerster

04 May 2018

Morrison & Foerster – informally dubbed MoFo – acted on the US$6.3 billion restructuring of global telecommunications company Avaya, which completed last year

Global heads of restructuring and insolvency Judge James Peck, Lorenzo Marinuzzi
Partners in restructuring team 15
Active cross-border restructuring and insolvency matters 13

History of the practice

James Peck, the former Southern District of New York bankruptcy judge who presided over the Lehman Brothers bankruptcy, has been Morrison & Foerster's (MoFo) global co-chair of business restructuring and insolvency since he left the bench in 2014.

Under his tutelage, MoFo has taken decisive action to expand its restructuring and insolvency practice, particularly with a view to taking on more cross-border work. In late 2015, the firm hired Peter Declercq and Sonya Van de Graaff from Schulte Roth & Zabel in London. Early the following year it took partner Jonathan Levine from Andrews Kurth in New York.

Before that, in 2013, the firm recruited senior of counsel Howard Morris to head its London business restructuring and insolvency group from Dentons. The business restructuring and insolvency practice's other global co-chair is New York partner Lorenzo Marinuzzi.

Network

New York and London are MoFo's main restructuring centres, but it also has lawyers in Los Angeles, San Francisco, Boston and Washington, DC.

Who uses it?

MoFo is best-known for its success representing creditors in restructurings. The firm represented the official committee of unsecured creditors of global telecommunications company Avaya. It has also represented a number of official committees of unsecured creditors in energy-sector bankruptcies, including US-based Peabody Energy and SunEdison.

MoFo also has a booming debtor-side practice, acting for Maxus Energy, an oil and gas company owned by Argentina's state-run oil company, IT services company Ciber, and Sungevity, one of the largest private residential solar installation companies in the US.

Offshore, MoFo continues to represent the liquidators of multiple Cayman Islands and British Virgin Islands investment funds against clawback claims relating to the Bernard Madoff Ponzi scheme. The firm is regularly retained by Big Four accounting firms such as KPMG and Deloitte.

Historical track record

In 2015, Judge Peck was New York counsel to Ukrainian miner DTEK when it changed the governing law of some of its debt from New York to English law via majority creditor approval, then obtained a judgment from a UK court that the change in law was "sufficient connection" for the company to use an English scheme of arrangement. Peck successfully argued in May 2015 that changing the law would not impair the rights of noteholders, and that the change was provided for in the notes' indenture agreement. The firm acted alongside Latham & Watkins in that case.

In 2012, MoFo represented unsecured creditors in the Chapter 11 case of the baseball team Los Angeles Dodgers, which ended up being one of the largest and most successful restructurings of a sports franchise in US history with creditors receiving 100% cash recovery.

When MF Global filed its Chapter 11 proceedings in 2011, the broker had US$41 billion in assets: it was the largest bankruptcy filing of that year and the eighth largest in US history. MoFo's team led an investigation into its actions ahead of the bankruptcy filing, then assisted the trustee in making over 100 claims to claw back more than US$3 billion from MF Global affiliates and subsidiaries.

Recent events

During the research period, MoFo represented California-registered global telecoms company Avaya's official committee of unsecured creditors in its US$6.3 billion restructuring, which had its Chapter 11 plan confirmed in November 2017. MoFo's London office provided English law advice in connection with group pension claims and cross-border insolvency matters.

The firm is advising Dutch multinational ING Bank as agent to a syndicate of lenders to Denmark's OW Bunker group, which is currently in Chapter 11. OW Bunker was once the world's largest marine fuelling company, with operations in 29 countries. The global insolvency proceedings are "substantial and complex," MoFo says, and "may take some time to resolve".

In a deal that closed in May 2017, MoFo advised US IT service company Ciber in the US$90 million sale of substantively all of its North American and Indian assets to IT company HTC Global Services.

Judge Peck served as a mediator in the Chapter 11 cases of Bermuda-registered oil services shipper Toisa, which culminated in the negotiation of a restructuring term sheet that was approved by the bankruptcy court in January this year.

MoFo continues to act for the liquidators in connection with the "enormous and highly complex" US$9.2 billion liquidation of Cayman investment fund Saad Investments Company, which has been ongoing for eight years. The case which has raised a number of jurisdictional issues, and "could be of monumental importance to the global trusts industry," MoFo says.

Van de Graff leads the London-based team acting for creditor Burling Loan Management in the Lehman Brothers International (Europe) insolvency proceedings.

In January 2017, MoFo hired restructuring partner Dennis Jenkins from WilmerHale in Boston. In the same month, the firm promoted two new partners with restructuring experience – Gemma Anderson and Matthew Lau – in London and Hong Kong, respectively. In February 2018 MoFo hired London-based Clifford Chance cross-border finance partner Caroline Jury.

Morris, Peck and Van de Graaff were the editors of GRR's first book on ad hoc committees in restructurings, The Art of the Ad Hoc, in 2017.

Client references

Patrick Healy, senior vice president and director of global bankruptcy, debt and agency services at Wilmington Savings Fund Society (WSFS) in Wilmington, Delaware, describes MoFo as "very good lawyers and advocates for their clients".

MoFo has represented WSFS in its capacity as an indenture trustee and administrative agent, and has represented unsecured creditor committees WSFS has been member of. "I have found that MoFo does an excellent job building a consensus and maximizing recoveries for unsecured creditor committees," Healy adds.