- In re Bangor and Aroostook Railroad Company, United States Bankruptcy Court for the District of Maine. Bangor and Aroostook Railroad Company (“BAR”) entered into a series of agreements with our client, a major North American railway company (“RR”) whereby RR paid $5 million to BAR and BAR granted RR an easement and trackage rights over a railroad line owned by BAR and agreed to haul RR cars over the line at a specified rate. A year later, BAR filed for reorganization under Subchapter IV of Title 11, Railroad Reorganization, and sought to oust RR from the line pursuant to section 1170 of the Bankruptcy Code, under which the bankruptcy court may authorize the abandonment of a railroad line. We were bankruptcy counsel to RR in this case of first impression, which wound its way from the bankruptcy court to the district court to the Surface Transportation Board, and ultimately to the United States Court of Appeals for the First Circuit. The First Circuit held in favor of RR that the bankruptcy court does not have the authority under section 1170 to adversely abandon the lines or trackage rights of a non-debtor, on the petition of a debtor railroad who owned those lines at the time of bankruptcy. Howard v. Surface Transportation Board, 389 F.3d 259 (1st Cir. 2004).
- In re Circuit Systems, Inc., United States Bankruptcy Court for the Northern District of Illinois. Before such lawsuits hit the headlines, we filed suit on behalf of the Plan Trustee of the Liquidating Trust of Circuit Systems, Inc. against the officers and directors of Circuit Systems, Inc. alleging that the directors of this publicly traded company breached their fiduciary duties by failing to scrutinize excessive compensation packages to management and by authorizing insider transactions that benefited management. The settlement of the suit allowed the Plan Trustee to distribute over a million dollars to unsecured creditors.
- In re Automotive Professionals, Inc., United States Bankruptcy Court for the Northern District of Illinois. In this Chapter 11 bankruptcy, we represented the Chapter 11 Trustee of a large automotive warranty company. The Chapter 11 Trustee initially was engaged in protracted litigation with the Illinois Department of Insurance as to whether an automotive warranty company is an “insurance company” that must be liquidated under state law. The Trustee ultimately reached a resolution with the Illinois Commissioner of Insurance that allowed the case to proceed in bankruptcy court. We then brought suit against the officers and directors, the company’s primary insurer of the auto warranties, the company’s D&O insurer and the company’s investment managers. These lawsuits raised such complex issues as whether funds collected from consumers constitute trust funds, whether third parties should reasonably have known that consumer funds could not be pledged to secure loans to the company, whether an insurance company can retroactively limit coverage of claims, and whether settlement of the underlying D&O claims vitiated the insurance coverage. Through litigation and settlements, the Trustee was ultimately able to make a significant distribution to consumers.
- In re Lakewood Engineering & Manufacturing Co., United States Bankruptcy Court for the Northern District of Illinois. The debtor was the second largest manufacturer of box fans in North America. Our client purchased the assets of the debtor in a bankruptcy sale. Subsequently, our client and the Chapter 7 trustee jointly pursued a lawsuit against a competitor who had been manufacturing some of the debtor’s fans under a supply agreement before the bankruptcy. The competitor continued to manufacture and sell the debtor’s fans after the bankruptcy and after our client purchased the assets. The litigation, currently on appeal before the United States Court of Appeals for the Seventh Circuit, raises unique issues regarding the intersection of bankruptcy and trademark law.
- In re Tribune Company, et al., United States Bankruptcy Court for the District of Delaware. In the highly publicized going-private transaction of the Tribune Company, holders of stock and stock options tendered their shares. Among the hundreds of thousands of stockholders were Tribune’s current and former officers and managers who had received stock or stock options from Tribune as part of Tribune’s employee compensation plan. We represent current officers and managers who were sued by the Creditors’ Committee under preference and fraudulent transfer theories for recovery of the funds the officers and managers received when they tendered their stock and stock options.
