Menu

Unsecured Creditors & Committee Representation

Lathrop GPM has significant experience representing committees and members of Committees in Chapter 11 cases.  We formulate strategies for the committee aimed at maximizing the recoveries to the committee’s constituents.

Representative Experience:

  • We represented the unsecured creditors’ committee in the Chapter 11 bankruptcy of a regional grocery wholesaler cooperative.  The case involved complex issues relating to pension plan withdrawal liability under the Employee Retirement Income Security Act, excise taxes owed upon termination of an overfunded retirement plan, improper amendments to the debtor’s retirement plan, substantive consolidation of related debtors’ estates, and directors’ breach of fiduciary duties.  The committee commenced litigation against recipients of improper retirement benefits enhancements which resulted in a settlement favorable to creditors.  The committee also successfully opposed conversion of the case to a Chapter 7 liquidation and ultimately obtained confirmation of the committee’s plan of liquidation that consolidated the estates of two other debtors, thereby substantially increasing funds available for unsecured creditors, and placed the liquidation of remaining assets in the hands of a responsible party appointed by the creditors.
  • We represented the unsecured creditors’ committee in the Chapter 11 case of a national restaurant owner, operator, and franchisor that had operations in 25 states with $75 million in debt secured by the debtor’s assets and approximately $14 million in general unsecured claims.  The secured lenders were substantially undersecured by more than $50 million.  As counsel for the Committee, we negotiated with the debtor and its secured lenders on issues relating to debtor-in-possession financing, lease assumption and rejection, reclamation claims, administrative expense claims, the sale of a portion of the debtor’s assets, and plan treatment.  As the result of our negotiations, the secured creditors agreed not to take any distribution on account of their unsecured deficiency claims and provided a distribution pool for the general unsecured creditors.  After confirmation of the plan, Lathrop GPM represented the plan administrator (one of the committee members) in pursuing avoidance actions and making distributions to the unsecured creditors.
  • We served as counsel for the unsecured creditors’ committee in a large department store Chapter 11 case with several millions of dollars of unsecured claims. The case involved complex issues relating to insurance fraud and fraudulent insider dealings.  The committee commenced litigation against the insiders seeking recovery of fraudulent payments made to the insider prior to bankruptcy, and the Committee ultimately obtained a sizeable recovery on behalf of the unsecured creditors.
  • We represented one of the largest unsecured trade creditors in the Chapter 11 case of the nation’s largest agricultural cooperative, advising the client, and assisting committee counsel, respecting numerous issues relating to the realization of the most possible value for unsecured creditors.  Our representation included advising the client with respect to its role on the unsecured creditors’ committee, strategies the committee could implement, negotiations relating to asset sales and plan litigation, selection of a Chapter 11 plan trustee, Key Employee Retention Programs, retirement and severance issues, preference defense strategies, and plan treatment.  We also analyzed and advised the client on a creative and aggressive defense to the estate’s preference action against the client, resulting in the dismissal of that action with prejudice.
  • A member of the firm served as chairman of the Creditors’ Committee and represented the indenture trustee for $34 million of subordinated debt in a Chapter 11 bankruptcy case.

Contact