Advising Sberbank in its International Bank of Azerbaijan challenge
|Global heads of restructuring and insolvency:||Brad Eric Scheler|
|Partners in restructuring team:||5|
|Restructuring lawyers in Who’s Who Legal:||2|
History of the practice
Although its predecessor firms date from the turn of the 20th century, Fried Frank Harris Shriver & Jacobson's current incarnation with five name partners came into being in 1971.
The firm's restructuring and insolvency practice, led by long-time New York partner Brad Eric Scheler, has been around in the US since those early days, but it received a massive cross-border boost in 2016 with the hire of Ashley Katz in London. The former joint head of Mayer Brown's UK R&I team who is licensed to practise in England and Wales and South Africa, Katz brought with him a wealth of experience that includes advising financial institutions with exposure to Lehman Brothers and MF Global.
Fried Frank poured further resources into the team with the promotions of Peter Siroka to partner and Julia Smolyanskiy to special counsel in the US, and in Germany by hiring Christian Kleeberg – an M&A partner with restructuring experience from Taylor Wessing in April 2016.
Fried Frank also has at its disposal several experienced of counsel including Jean Hansen and Bonnie Steingart in New York. Hansen retired from the partnership in 2012 after nearly 30 years as a fee-earner at the firm, while Steingart had been a partner since 1986.
The five partners who practise restructuring and insolvency law exclusively are based in New York and London. The wider firm also has offices in Washington, DC and Frankfurt.
Who uses it?
Creditors, debtors and all other types of stakeholders – including third-party purchasers – in US, UK and cross-border matters.
The firm acted for Goldman Sachs as equity holder and lender to metal component manufacturer Constellation Enterprises, and Canadian environmental company Tervita Corporation in Chapter 11 cases.
Goldentree Asset Management, real estate investor Vornado Realty Trust and US holding company CIT Group have all called upon Fried Frank’s services in the past.
Debtor clients have included Mexican supermarket Contraladora Comercial Mexicana, US publisher Rand McNally & Company and UK broadband company Telewest.
Katz and disputes partner Justin Michaelson are leading a team representing Russia's Sberbank, which hopes to enforce rights in a US$20 million term facility agreement with the International Bank of Azerbaijan (IBA) in the UK courts. Sberbank opposes IBA’s bid for a global moratorium to carry out its restructuring, citing the century-old English Gibbs rule.
On 18 December 2018, The England and Wales Court of Appeal denied IBA's request for an indefinite moratorium on the creditor claims, directing it to pay costs worth £270,000 for the failed appeal. The IBA's foreign representative Gunel Bakhshiyeva said she would take the matter to the Supreme Court.
Meanwhile in 2018, Fried Frank advised Goldman Sachs in the restructuring of the Puerto Rico Sales Tax Financing Corporation (COFINA), and Centerbridge Capital Partners as exit financier to Seadrill.
In the UK, the firm also advised on company voluntary arrangements (CVAs) for football facilities company Powerleague Group, and for restaurant chain Gaucho.
In October 2018, partner Matthew Roose left the firm for Ropes & Gray in New York. He had joined Fried Frank as an associate in 2006 and worked on the US$42 billion Chapter 11 of Texas power company Energy Future Holdings, as well as representing distressed investors in the 2008 collapse of US bank Washington Mutual.
Associates Bryan Cimala and Corey Flick joined Fried Frank in September 2017, followed by associate Ola Majiyagbe in March 2018. Meanwhile, associates Alix Brozman, Alysa Ain and Nancy Bello left the firm between May and October 2018.
Restructuring and insolvency
Fried Frank’s global restructuring and insolvency practice is multidisciplinary with integrated resources that cover all aspects of stressed and distressed situations, with a reputation for excellence, broad-based experience, creativity and efficiency. Our lawyers have a wealth of experience and have a keen understanding of the markets in which our clients operate, particularly as they undergo significant change.
Our team represents a wide range of clients in UK and US domestic matters, as well as cross-border restructurings, including both formal insolvencies as well as out-of-court restructurings of financially troubled companies (including but not limited to administrations, liquidations, schemes of arrangement and company voluntary arrangements (CVAs)).
Our experience includes representing boards, corporate debtors, creditors, bondholders and equity committees, secured and unsecured creditors, and other sources of financing and parties interested in acquiring assets and businesses from financially troubled companies. The fact that we represent both debtors and creditors has tangible benefits for clients, in that it gives us a deep understanding of how to resolve the problems presented in any troubled-company situation.
Our transactional experience includes advising the following.
- Centerbridge Partners as the new capital provider in connection with the successful comprehensive restructuring of approximately US$14 billion in liabilities of Seadrill Limited including 13 credit facilities consisting of 70-plus banks across North America, South America, Europe and Asia within the Seadrill consolidated group, which included four distinct operating companies. With over US$21 billion in assets, the Seadrill restructuring is one of the largest recent global restructurings.
- Solace Capital Partners as a holder of more than one-third of the senior unsecured notes of David’s Bridal in connection with its prepackaged chapter 11 restructuring.
- Seritage Growth Properties, a publicly traded REIT and owner of a large portfolio of wholly owned and joint venture retail properties, several of which are leased to Sears Holdings Corporation, in connection with the Sears chapter 11 cases.
- Ascribe Capital Gates Capital Management as the largest prepetition creditors and DIP lenders in the prepackaged chapter 11 case of Nuverra Environmental Solutions, pursuant to which Ascribe and Gates became the majority equity owners of reorganised Nuverra and funded an exit facility for Nuverra together with another lender.
- The board of directors of the Gaucho Restaurant Group on its restructuring activities ahead of the group’s filing for administration and implementation of a company voluntary arrangement.
- Permira portfolio company Metalogix, a leading content infrastructure software vendor, in connection with its restructuring efforts and eventual sale to Quest Software, a global systems management and security software provider.
- Vornado Realty Trust as lead and primary outside bankruptcy counsel on a variety of engagements including the Sears Holdings Corporation chapter 11 case.
- Ascribe Capital in connection with the restructuring and recapitalisation of CTI Foods LLC.
- Centerbridge Partners in connection with a preferred stock capital raise for iHeartMedia.
- Goldman Sachs in connection with the proposed treatment of their outstanding swap agreements with the Peurto Rico Sales Tax Financing Corporation (COFINA) in COFINA’s pending Title III case.
- West Street Energy Partners, LP and Energy ServicesCo Cayman LP, affiliates of Goldman Sachs and Corre Partners Management, in connection with the restructuring of FloWorks International LLC, a leading supplier of pipe, valves, fittings and related products to the energy and industrial sectors headquartered in Houston, Texas.
Our contentious experience includes advising the following.
- Sberbank of Russia in a successful challenge against an application made to the Court of Appeal of England and Wales by the International Bank of Azerbaijan (IBA), pursuant to which the IBA sought an order for a permanent moratorium against creditor action in England and Wales. The application related to the voluntary restructuring of US$4 billion of debt of the IBA in Azerbaijan.
- Spirit MTA REIT in its capacity as a secured lender to Shopko Stores Operating Co, LLC, in connection with Shopko’s chapter 11 restructuring.
- A group of noteholders who hold more than 80% of the debt of Fuse Media in connection with the restructuring and recapitalisation of Fuse Media.
- LionTree Advisors LLC in connection with the litigation over their retention as financial adviser to iHeartMedia.
- Ad hoc group of noteholders of Alion Science and Technology Corporation, a leading global provider of engineering solutions and services that address problems relating to national defense and other critical government areas, in connection with Alion’s out-of-court restructuring of approximately US$600 million of indebtedness.
- CNO Financial Group in connection with the termination of reinsurance agreements with Beechwood Re and the monetisation of approximately US$500 million in assets that that were held for the benefit of CNO prior to the recapture of approximately US$500 million of closed block long-term care liabilities from Beechwood Re.
- The Seadrill matter won the 2018 GRR award for cross-border cooperation in a specific restructuring or insolvency matter, and was shortlisted at the IFLR Europe Awards 2019 for Restructuring Deal of the Year.
- Turnarounds & Workouts listed Ashley Katz in its special report (2018), “European Restructuring Practices of Major US Law Firms”; and Peter B Siroka in its special report (2018), “Outstanding Young Restructuring Lawyers” special report. Mr Katz was noted for several of his representations, including clients Sberbank, the board of the Gaucho restaurant group, and Centerbridge LP. Mr Siroka was noted for several of his representations, including clients C&J Energy Services and Gates Capital Management.
- Partners Brad Eric Scheler, Gary L Kaplan and Ashley Katz are ranked by Chambers and Partners for restructuring and insolvency.
- Fried Frank is ranked by The Legal 500 US for restructuring (including bankruptcy).
- Fried Frank is recognised in US News 2018 “Best Law Firms” rankings for bankruptcy and creditor debtor rights/insolvency and reorganisation law.
- Fried Frank is recognised in Global Restructuring Review's 2018 GRR 100 list.
For more information on Fried Frank’s restructuring and insolvency practice, please visit our website here.