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

GRR 100 2019

Paul Weiss Rifkind Wharton & Garrison

16 May 2019

 

 This year it has had a hand in the restructurings of Luxembourg-registered Pacific Drilling and iconic retailer Sears Roebuck & CoGlobal heads of restructuring and insolvency Alan Kornberg, Paul Basta
Partners in restructuring team 11
Restructuring lawyers in Who’s Who Legal 6

History of the practice

Together with its predecessor firms, Paul Weiss Rifkind Wharton & Garrison has had a presence in New York City for almost 150 years, and an international reach for more than 50 years. The first iteration of the firm, Frank & Weiss, opened its doors in April 1875 when Julius Frank and Samuel Weiss joined forces to open their firm on Broadway, New York.

Today, partners Alan Kornberg and Paul Basta co-chair the firm's restructuring and insolvency practice from New York, which also leverages resources from other practice areas in the firm including the corporate, finance and securities groups. The bankruptcy practice includes ten partners, four counsel and 19 associates.

Other names to know include Kelley Cornish, who was named "woman of the year" by the International Women's Insolvency and Restructuring Confederation last year, and Andrew Rosenberg who is currently advising bondholders in the restructuring of US$18 billion worth of debt issued or guaranteed by Puerto Rico.

Paul Weiss has been engaged in cross-border restructuring matters for more than 25 years, including early assignments acting for the administrators of British media empire Maxwell Communication, and negotiating a cross-border protocol for the joint liquidators of the BVI-based Manhattan Investment Fund to coordinate proceedings in the US, Bermuda and the BVI.

Network

The entire restructuring and insolvency team operates out of Paul Weiss's New York office, but the firm also has offices in Washington, DC, Wilmington and Toronto. Outside of North America, it also has stations in London, Hong Kong, Beijing and Tokyo.

Who uses it?

It advises stakeholders across the bankruptcy process, including debtors, joint administrators, liquidators, and particularly ad hoc creditor committees.

Clients include investment funds Oak Hill Capital, Apollo Global Management and Oaktree Capital, financial services firms Citigroup and Deutsch Bank, Icelandic bank Flitnir hf and US-Canadian retailer Performance Sports Group.

Historic track record

As well as the early Maxwell and Manhattan Investment Fund appointments, Paul Weiss represented the ad hoc committee of unsecured noteholders in the bankruptcy of Swiss-headquartered security systems provider Tyco International in 2002, and the English and Bermudian administrators of Trenick Group the following year.

More recently it has been advising Citibank and its worldwide affiliates in connection with claims arising from Lehman's collapse.

In 2013, Paul Weiss acted on behalf of an ad hoc group of senior lenders, executing one of Australia's first debt-for-equity conversions in a large restructuring, for entertainment company Nine Entertainment.

The following year, it represented an ad hoc group of lenders in the cross-border restructuring of UK-based supply chain management group CEVA in an out-of-court restructuring playing out in the UK, US and the Cayman Islands.

Meanwhile, its corporate and bankruptcy teams worked for Swedish telecoms giant Ericsson in multiple transactions to purchase parts of Nortel's US$4.5 billion patent portfolio, following the latter's high-profile collapse.

It also advised North America's largest forest products company AbitibiBowater in cross-border proceedings coordinated in the US and Canada that saw a successful plan approved in 2010.

Elsewhere, Kornberg was US counsel to the ad hoc committee of senior noteholders of multinational oil and gas group Pacific Exploration in a restructuring implemented through proceedings in Columbia, Canada and the US.

Recent events

This year Basta has been providing counsel to the holding company of historic US department store chain Sears Roebuck after it filed Chapter 11 proceedings with 49 affiliated companies in October 2018. As well as the filing, the company secured DIP financing from its senior secured asset-based revolving lenders and another loan from ESL Investments – the hedge fund owned by Sears’ erstwhile CEO Eddie Lampard.

In Delaware, partner Brian Hermann led a team advising the ad hoc group of secured noteholders in the Chapter 11 restructuring of iconic guitar maker Gibson, after it filed for bankruptcy in May 2018 following an ill-fated push to diversify its business that also led to liquidation proceedings in at least eight different jurisdictions. In June the Delaware bankruptcy court approved an atypical US$135 million post-petition financing package provided by the secured noteholders. The company exited bankruptcy in October, after creditors approved its fourth amended plan.

Herman and Kornberg have also been advising various subsidiaries of French oil services group CGG on its restructuring in the US and France – the first French-US prearranged bankruptcy. They led the team that prepared various subsidiaries for Chapter 11 proceedings and devised a strategy to cram down dissenting stakeholders. In February 2018 CGG announced it had successfully cut its debt by US$2 billion.

Elsewhere, Hermann has been representing holders of secured notes, issued by the holding company that owns Toys "R" Us's international business, in the restructuring of the company and various subsidiaries in Canadian and US proceedings.

New York partners Andrew Rosenberg, Andrew Ehrlich and Elizabeth McColm acted for the ad hoc group of debtholders in the Chapter 11 restructuring of Luxembourg-registered drill contractor Pacific Drilling after it collapsed in November 2017, blaming the 2014 oil price crash. In October, the company’s fourth amended plan was approved by the SDNY bankruptcy court and will see it raise US$1 billion in new notes and US$500 million in new equity through a rights offering and private placement.

The firm also acted in the restructuring of Mexican drilling company Oro Negro with Rosenburg and partner Elizabeth McColm taking the lead. They advised an ad hoc group of senior secured creditors in connection with the US$916 million restructuring of secured debt obligations governed by Norwegian law. In May 2018, the SDNY bankruptcy court granted recognition of the driller’s Mexican insolvency proceedings.

Also in New York, partner Kyle Kimpler successfully represented Citigroup Global Markets in its objection to Lehman Brothers Holdings’ plan to issue new shares to swap with securities issued by five UK-registered Lehman partnerships, arguing the substitution would violate section 1123 of the US Bankruptcy Code. The New York court denied Lehman Brothers’ motion in October 2018.

In January 2018, Kirkland & Ellis associate Neal Paul Donnely left London to join Paul Weiss in New York.