Reorganization & Creditors' Rights - Golenbock Eiseman Assor Bell & Peskoe LLP

We pride ourselves on understanding the strategic implications of the restructuring process.

Whether in Chapter 11 or out of court, the restructuring process is complex, often requiring competing participants to make crucial decisions quickly in situations where each party has a different agenda.

Working successfully in this dynamic environment requires an intimate knowledge of the process, the law, and the strategic needs of all the players. Our understanding of the legal and strategic implications of the restructuring process may mean the difference between success and failure.

Our lawyers have significant experience representing the full spectrum of key parties in restructuring matters, including debtors, indenture trustees, investors, asset purchasers, Chapter 11 trustees, liquidation trustees, committees, landlords, secured and unsecured creditors, lenders, and boards of directors.

We employ an integrated team approach to restructuring matters that draw upon the firm’s bankruptcy, litigation, and transactional expertise.

Representative Engagements

Indenture trustees in Boart Longyear, Horsehead Holdings, New Gulf Resources, Lyondell Chemical Company and Charter Communications cases
Debtors in Integrated Health, Rotech Medical, Investment Properties of America and Family Golf Centers cases
Estate fiduciaries, including litigation trustee in Tribune case, Chapter 11 trustee in South Side House and Lehr Construction cases, and liquidating trustees in LandAmerica and 1031 Exchange Services cases
Foreign liquidator in Sovereign Assets Chapter 15 case
Landlords and lease purchasers in Sports Authority, Radio Shack, A&P and Cosi cases
Strategic asset purchasers in Kasper and Taylor-Wharton cases, and financial asset purchaser in Warnaco case
Secured lenders in Ahern Rentals, Foamex and Semgroup cases
Official creditors’ committees in Motor Coach Industries, Riverstone Networks and LTV Networks cases
Ad hoc noteholder groups in Calpine, Laidlaw and Triangle Wire cases and significant debt holders in Extended Stay and Weirton Steel cases
Boards of directors in Exide and Dow Corning cases

Case Study

International Business Practice

Foreign Issuer NASDAQ IPO

The Situation

A United Kingdom-based biotechnology company wanted to raise capital in the United States through an Initial Public Offering (IPO) and list on a US national exchange (Nasdaq) for the offering. Among the issues that needed to be resolved:

Deciding whether to remain a UK corporation or reorganize into an offshore jurisdiction, such as the Cayman Islands;
Finding a solution to the UK stamp tax imposed on share transfers of UK issuers which the US securities market electronic transfer system cannot accept responsibility for; and
Addressing a number of accounting statement timing and presentation issues to satisfy the UK issuer and SEC regulations (Form F-1)

The Solution

The GEABP team, working with UK counsel, helped the UK issuer explore different alternatives to satisfy the various issues and stakeholder constituencies:

After evaluating many jurisdictional and reorganization issues, including potential tax considerations of the pre-public shareholders of the UK issuer, it was determined that the UK issuer would remain as a UK corporation for operational, research grant and tax considerations. However, that decision raised the second consideration of being able to issue securities in the US and the transfer of shares in the US markets without having the UK stamp tax burden.
In order to avoid the UK stamp act on US market transfer, the GEABP team introduced the UK issuer to the American Depositary Share (ADS) concept and made an introduction to Bank of New York Mellon as an ADS issuer.
Throughout the IPO process, as the offering shaped up, the GEABP team advised the UK issuer on its SEC disclosure about the business operations, securities offered, management, and financial statement requirements. The GEABP team negotiated and advised on the offering documentation, all of which was under New York law.

The Result

The UK issuer successfully completed its IPO in February 2022, listing on Nasdaq. The securities offered were shares in the form of ADSs and warrants for ordinary shares that would be converted to ADSs upon the warrant exercised for deposit into the DTC system.

Reorganization & Creditors’ Rights

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