GRR 100 2020

Young Conaway Stargatt & Taylor

Professional notice

The Delaware firm helped logistics group Syncreon to carry out a multinational restructuring

Global head of restructuring and insolvencyJoseph Barry and Sean Beach
Partners in restructuring team25
Restructuring lawyers in Who's Who Legal6

History of the practice

Young Conaway Stargatt & Taylor was founded in 1959 by Hy Young, James Conaway, Bruce Stargatt and William Taylor. Its highly regarded bankruptcy and restructuring practice - the largest in the US district of Delaware - has experience across a number of sectors, including energy, financial and professional services, food and beverages, healthcare, media and real estate.

John Dorsey, a former general counsel and bankruptcy partner at the firm, was sworn in as a US bankruptcy judge for the District of Delaware in June 2019.

Network

The bankruptcy group is based in Wilmington and has played a leading role in most significant bankruptcies in the district. Partners Joseph Barry and Sean Beach became co-chairs of the practice last year, taking over from Pauline Morgan, who remains with the firm as a partner.

The wider firm also has offices in Georgetown and New York.

Who uses it?

Young Conaway Stargatt & Taylor represents debtors, creditors' committees, secured and unsecured creditors, purchasers, plan sponsors and shareholder groups in jurisdictions throughout the US and further afield. It has particular experience advising private equity funds on distressed portfolios.

Past clients include Canadian gold miner Crystallex International, Chicago-based publisher Sun-Times Media Group, holding company Indalex Holdings Finance and one of the oldest professional baseball teams in the US, the Los Angeles Dodgers.

Historic track record

The firm played a major role in the huge US$7.3 billion cross-border insolvency of global telecoms group Nortel Networks, advising the joint administrators of Nortel Networks UK and its affiliated debtors in the US.

Morgan was instructed by the world's largest print maker, AbitibiBowater, in the cross-border restructuring of its US$6 billion debt. It successfully emerged from Companies' Creditor Arrangement Act (CCAA) and Chapter 11 proceedings at the end of 2010 and later changed its name to Resolute Forest Products.

In another significant case, the firm acted as co-counsel, with Willkie Farr & Gallagher, to Canadian gold minder Crystallex in its Chapter 15 proceedings in Delaware, following an initial CCAA filing in Canada.

In New York, it served as special counsel for Irving Picard, the trustee to the Madoff estate, who is charged with unpicking the US investor's US$65 billion Ponzi scheme and paying out creditors.

More recently, Young Conaway Stargatt & Taylor helped to complete the US$2.7 billion restructuring of Ukrainian steelmaker Metinvest via three schemes of arrangement in the UK filed in parallel with three separate Chapter 15 recognition proceedings in Delaware. Baker & McKenzie and Allen & Overy advised on the UK schemes, while Young Conaway Stargatt & Taylor took care of the US side. All three firms picked up an award for the deal at the inaugural GRR Charity Awards ceremony in 2017 for "innovation in cross-border insolvency and restructuring".

In 2017, following the global recall of around 120 million faulty airbag inflators produced by the Takata group, three of its Japanese debtors hired Young Conaway Stargatt & Taylor as US counsel in Chapter 15 proceedings to recognise their Tokyo bankruptcies, and in a Chapter 11 for US affiliate TK Holdings. A Delaware court recognised Takata's Japanese bankruptcy in November 2017, rejecting objections from drivers who had commenced multi-district litigation against the group. In April 2018, all of Takata's global assets bar those relating to the manufacture of airbag inflators were sold to Michigan-based competition Key Safety Systems for US$1.6 billion, after a settlement was reached between the company, creditor groups and injured drivers.

Recent events

During the research period, Young Conaway Stargatt & Taylor helped the top company of multinational logistics group Syncreon to secure US recognition of its English scheme of arrangement. Syncreon changed its New York law-governed debt to English law to complete the scheme as part of a restructuring across the UK, the US, Canada and the Netherlands.

The firm is currently advising US and Canadian subsidiaries of French talc producer Imerys on Chapter 11 proceedings, as the group faces thousands of lawsuits alleging that its products cause cancer. A Canadian arm of the business has also filed for CCAA protection in Canada.

Young Conaway Stargatt & Taylor is also co-counsel to global nutrition supplement retailer GNC in a Chapter 11, for which GNC sought CCAA recognition in Ontario.

Also on the debtors' side, the firm represented international tobacco company Pyxus on a pre-packaged bankruptcy filing designed to eliminate US$636 million of second lien notes. A Delaware judge approved the tobacco-turned-hemp producer's plan, after waving off a revaluation request from wiped-out shareholders.

It also advised the US arm of Italian jeans maker Diesel on a pre-packaged Chapter 11, designed to shed the company's retail leases; and acted on another pre-packaged Chapter 11 for Texas-headquartered Mattress Firm, a subsidiary of embattled South African conglomerate Steinhoff.

Other pre-pack restructurings it has worked on recently include a US$925.6 million planned asset sale for tinned seafood maker Bumble Bee Foods, whose Canadian subsidiaries also sold their assets through CCAA proceedings; and a pre-packed debt for equity swap for US-Mexican die cast manufacturer Pace Industries, which survived a challenge from a shareholder that claimed to have blocking rights through golden shares.

Young Conaway Stargatt & Taylor's debtor-side mandates do not end there: it also advised Global Cloud Xchange, a subsidiary of Indian mobile network Reliance Communications, on a Chapter 11 case that saw the subsidiary reduce its bond debt by US$150 million; and acted for US and UK subsidiaries of pharma group Egalet Corporation in a Chapter 11 debt for equity swap.

The firm is also sole lead counsel to a group of Cayman Islands-incorporated funds under the Zohar name on their US$1.5 billion Chapter 11 and on the separate Chapter 11 of Dura Automotive Systems, a company to which they made term loans. In the Dura case, the firm successfully challenged a proposed debtor-in-possession financing by a Dura insider on its clients' behalf and got the venue of the case transferred from Nashville to Delaware.

On the creditor side, it is advising the creditors' committee of oil services company Paragon, which restructured through Chapter 11 in the US and administration in the UK. Both sets of proceedings have seen off challenges from former Paragon shareholder Michael Hammersley, who alleged that the administration is tainted by fraud.

Young Conaway Stargatt & Taylor is also counsel to the official committee of unsecured creditors of alternative investment manager Highland Capital Management, a Delaware-registered company with offices in East Asia and South America. Highland filed for Chapter 11 protection in Delaware in October, but the proceedings have since been transferred to the Northern District of Texas, where the company is headquartered.

In the Chapter 11 proceedings of Skillsoft - an Ireland-headquartered e-learning company that filed for bankruptcy protection alongside several of its US, UK, Irish and Canadian subsidiaries - the firm is acting for an unnamed investor.

Young Conaway Stargatt & Taylor's bankruptcy practice made several personnel changes during the research period. In addition to declaring Barry and Beach co-chairs of the practice, it promoted several other partners to key roles. Bob Brady became chairman, Mike Nestor rose to vice-chair and Ed Harron was elected to the firm's management committee.

Partner Kevin Guerke also joined from another Delaware firm, Baird Mandalas Brockstedt, in June 2019.

Young Conaway Stargatt & Taylor, LLP provides clients with a full range of legal services across multiple, award-winning practices, including Bankruptcy and Corporate Restructuring, Corporate Litigation and Counseling, Intellectual Property, Litigation, Business and Tax. Our attorneys collaborate to provide creative, client-centric solutions to a range of entities, including national and international corporations, small businesses and individuals.  We routinely work as lead counsel and co-counsel with colleagues from major law firms throughout the U.S. and around the world on some of the most significant bankruptcy, corporate, intellectual property, and commercial litigation matters being decided in the courts today.

Bankruptcy and Corporate Restructuring

Young Conaway’s Bankruptcy and Corporate Restructuring Section, comprised of 35 lawyers and ten paralegals, is one of the largest in Delaware and the Mid-Atlantic region.  Members of the Section typically represent both debtors and creditors and have significant relationships with the most well-respected law, financial advisory, accounting, investment banking, and restructuring firms. In addition, because of our experience and our network of insolvency experts around the country, Young Conaway is able to provide its clients with advice and expertise on all matters pertinent to chapter 11 proceedings, including, among other things, asset sales, financing, debt restructuring, the validity and extent of a secured creditor’s liens and claims, valuation, solvency, the analysis, prosecution and defense of potential bankruptcy and non-bankruptcy related causes of action, corporate governance and fiduciary obligations, and the most effective means of maximizing value.

Our bankruptcy and restructuring attorneys have a deep and broad scope of experience, allowing us to efficiently and effectively provide the highest quality legal advice to our clients on a wide range of restructuring matters.  Together with our colleagues who provide tax, corporate, litigation, employment, and business advice, Young Conaway’s bankruptcy attorneys are well equipped to provide sound, creative and effective legal solutions when companies encounter financial difficulties.  Collaboration is commonplace at the firm, and serves as an intrinsic quality of our law firm culture and core values. This collaborative nature also provides a competitive advantage in connection with negotiations, transactions, and litigation that our clients value.

Young Conaway’s representation of financially troubled corporate entities has earned it a national reputation as a preeminent insolvency practice group. Chambers USA: America’s Leading Lawyers for Business identified Young Conaway as one of the top bankruptcy firms in Delaware, recognizing the “team effort” adopted by Young Conaway’s Bankruptcy and Corporate Restructuring Section and the fact that “all the lawyers are experts in their subjects and at the cutting edge of the law.”  Clients also commented to Chambers USA researchers that the team was “very fast, very responsive and very able”. “They command the respect of the judges so it’s very clear to me that they’re extremely highly regarded.” The Deal, a bankruptcy publication, has repeatedly recognized Young Conaway as a top ten bankruptcy law firm.  In January, the firm earned a prominent placement on The Deal’s exclusive full-year 2017 Bankruptcy League Table rankings.  Young Conaway was the only Delaware-based law firm to have been ranked according to dollar volume, and was ranked third on the list for total number of bankruptcy cases.  The reputation of both the firm and the Bankruptcy and Corporate Restructuring Section continues to grow outside of the United States, as confirmed by the recent nomination in two categories at the Global Restructuring Review Awards.  Young Conaway received awards for "Small or Regional Law Firm That Impressed" as well as for “Innovation in Cross-border Insolvency and Restructuring.” The firm was also featured in Global Restructuring Review's publication, 100 - The Guide to Specialist International Restructuring Practices 2017.  Through its sophisticated questionnaire and independent research, Global Restructuring Review developed its guide of firms to contact when international businesses fail.

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