Katten Muchin Rosenman

The firm secured new appointments in the fashion and retail sector in 2020, but has recently been mourning the untimely death of its long-time national restructuring chair

History of the practice

Katten Muchin Rosenman was established in 2002 through the merger of Chicago firm Katten Muchin & Zavis and New York’s Rosenman & Colin. Primarily US-based, it also has an office in London and one in Shanghai.

For years, Katten’s national restructuring and insolvency practice was led by the late John Sieger, a partner who had been with it in Chicago since 2005 and had credits in several household-name cases, including the Chicago Tribune and United Airlines bankruptcies. After his sudden death in March 2021 at the age of just 51, the firm, which described him as “a true leader… a loyal friend and partner to so many and a natural mentor and sponsor to many of our colleagues”, waited several months before announcing the practice’s new co-chairs in July: New York partner Steve Reisman and Chicago-based Peter Siddiqui.

Reisman, who had already been co-chair with Sieger, arrived at Katten in 2018 as part of a high-profile five-partner hire from Curtis Mallet-Prevost Colt & Mosle.

In August 2020, the firm launched a restructuring practice in the UK for the first time with the hire of partner Prav Reddy from Charles Russell Speechlys.

Network

Unsurprisingly, the majority of Katten’s restructuring and insolvency lawyers are based in Chicago and New York, with a few faces also working out of Washington, DC, Los Angeles and Orange County in California, Dallas, Texas and London. 

Who uses it?

Everyone across the insolvency spectrum, but especially financial institutions and lending groups, in both complex bankruptcy proceedings and out-of-court restructurings. The firm acted for Bank of America as administrative agent of lending syndicates that funded a Las Vegas casino operator and a Nevada oncology hospital. It was also hired by the indenture trustee for US$6.4 billion in first lien notes issued by casino operator Caesars Entertainment Operating Company in the latter’s Chapter 11; and by the official committee of equity security holders in the Chapter 11 bankruptcy of pigment manufacturer Tronox.

On the debtors’ side, Katten represented Hartford Computer Group and telecoms repair and installation company Nexicore Services in Chapter 11 proceedings in the Northern District of Illinois, which were carried out in parallel to Canadian insolvency proceedings. It also acted for Long Island-based retailer Vitamin World as its co-Chapter 11 counsel with Saul Ewing Arnstein & Lehr.

The firm has recently been carving out a name for itself in the retail and fashion sectors especially, having been brought in for directors in the Toys “R” Us bankruptcy and for the debtors in luxury department store Barneys’ Chapter 11, among others.

Historic track record

Katten was lead counsel to inventory data collection group WIS International in a successful out-of-court restructuring of senior and mezzanine debt claims, which involved the sale of its Canadian and European subsidiaries. The deal also saw the resolution of various tax and litigation claims. 

Partners at the firm also provided lead counsel to Wilmington Trust National Association as indenture trustee for US$200 million notes issued by a Canadian Nortel entity, Nortel Networks Limited, in the long-running sale proceeds allocation dispute that delayed the telecoms group’s US–Canadian bankruptcy. A global settlement in late 2016 finally brought the dispute – over US$7 billion in sales proceeds trapped in a lockbox – to an end, receiving court approval in Delaware, Ontario and London.

In a case that went all the way up to the US Supreme Court, Katten acted for US Bancorp and co-led the Seventh Circuit and Supreme Court brief drafting teams in In re RadLax and In re River Road. The cases dealt with whether a secured creditor (in this case, US Bancorp and its co-lender) has the right to credit bid at a bankruptcy sale of its collateral, even if that sale is being carried out under the terms of a restructuring plan to which the secured creditor has objected. Siding with US Bancorp, the Supreme Court found that it does, resolving a split in the US circuit courts.

Recent events

The firm witnessed many personnel changes through 2020.

As well as Reddy’s hire in August, it recruited partners Michaela Crocker from Jones Day, John Mitchell from Akerman in Dallas, and the former co-chair of Fox Rothschild’s bankruptcy litigation practice, Terence Banich, in Chicago in September. It also hired partners Julia Winters from White & Case and Michael Comerford from Paul Hastings in New York in October, and partner Kate Schering from Quinn Emanuel Urquhart & Sullivan in December of the same year.

A restructuring lawyer in Chicago, Stephanie Hor-Chen was also promoted to partner in November 2020.

Going the other way, one of the lawyers hired from Curtis at the same time as Reisman, Cindi Giglio, left Katten for investment firm Gordon Brothers in New York in June; while partner Charles Gibbs and special counsel Eric Seitz and Mark Patterson departed for McDermott Will & Emery in July, just a year after Katten recruited them from Akin Gump Strauss Hauer & Feld. Bankruptcy litigation partner Theresa Foudy, another one of the five Curtis alumni, also left for Morrison & Foerster in New York in October.

Top cases of the research period

Having advised disinterested directors of Toys “R” Us in 2018, the firm took on a similar role as counsel to a disinterested manager of debtor entity Mariposa Intermediate Holdings’ in the Chapter 11 proceedings of luxury department store Neiman Marcus. Twenty-three companies in the chain entered bankruptcy proceedings in May 2020, blaming the severe impacts of the covid pandemic on its business operations. By the time of the filing, the group had already replaced the boards at Mariposa and another entity with restructuring experts – in Mariposa’s case Tony Horton of AR Horton advisers. Neiman Marcus exited Chapter 11 in September 2020, having eliminated around US$4 billion and US$200 million in annual interest payments from its balance sheet.

Also on the retail front, Reisman and now-departed Giglio advised LPQ USA, a company set up by restaurant operator Aurify Brands, to buy US outlets of Belgian bakery chain Le Pain Quotidien out of Chapter 11. Aurify agreed to pay US$3 million in cash for the restaurants in the form of an upfront, super-priority debtor-in-possession financing, backed by liens on all of the group’s assets and with a clause stating that any outstanding obligations will be credit bid against the final sale price. The bakery chain’s Belgian holding company, PQ Licensing, also entered judicial organisation in Brussels and was listed as a creditor in the Chapter 11 process. BrunchCo, a group owned by private equity house M80 since July 2020, later brought Le Pain Quotidien’s UK assets through a pre-pack administration and also acquired its French and Belgian assets. 

In March 2020, Reisman also led a team acting for Richter Advisory, the Canadian receiver of nine companies in the Nygard clothing group, in a Chapter 15 petition seeking recognition in New York. White Oak, one of Nygard Group’s lenders, applied for the receivership after the retailer repeatedly defaulted on a credit facility. In the Chapter 15 petition, Reisman explained that White Oak had lost all confidence in the clothing company when it discovered its sole owner and director, Peter Nygard, had been named in a class action lawsuit before a Manhattan district court alleging he raped and sexually assaulted multiple women and children. The New York court granted Richter Chapter 15 recognition in November 2020. The class action against Nygard has been stayed pending a criminal investigation, but he was arrested in Canada in December 2020 under the local Extradition Act. In October 2021, in the Manhattan district court he agreed to be extradited to face charges of sex trafficking.  

Having been appointed as counsel of luxury retail chain Barneys in August 2019 alongside Kirkland & Ellis, Reisman helped the firm get approval from a New York court for its Chapter 11 restructuring plan in February 2020.  

Reddy’s team in the new London office secured a new instruction advising administrators appointed by Wells Fargo over the UK arm of international steel trader Kurt Orban Partners (KOP). At the same time, a US Katten team has been acting for KOP’s US receiver who was appointed in a limited capacity to oversee some of its local operations in July 2020. The bank filed breach of contract and guarantee claims against KOP and its sole member, Kurt Matthew Orban, before a California district court and in arbitration, after alleging that the trader failed to pay US$82 million on loans that matured at the end of June 2020.