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Bankruptcy, Restructuring & Workouts
There is no substitute for experience when it comes to helping companies in financial distress. Our group has successfully handled over 150 corporate reorganizations in Minnesota and across the country, and our two senior team members have more than 70 years of combined business bankruptcy experience.
What We Do
Behind our reorganizations experience are many more out-of-court workouts and confidential advice and planning engagements. These representations include services for debtors, creditors, buyers and sellers of distressed assets, receivers and other parties that may be affected by the financial distress of a business.
Achieving our client’s goals is about more than legal expertise. It’s about taking time to understand a client’s specific financial and operating concerns, and providing real, practical business solutions and respectful – yet honest – counsel on how to address critical issues. It’s about effective negotiation and advocacy with multiple parties such as lenders and unsecured creditors, and the ability to act quickly and efficiently under challenging circumstances. Finally, it’s about having the skills to generate both primary and alternative options that can help the clients meet their objectives. At Fredrikson & Byron, these are the attributes that set us apart.
Services:
For debtor or creditor clients, we provide services in bankruptcy reorganization cases, out-of-court restructuring, workouts of commercial loans, liquidations, debtor-creditor litigation in and out of bankruptcy court, commercial and banking litigation, reclamations, and receiverships and assignments for benefit of creditors.
The Bankruptcy, Reorganization & Workouts Group represents creditors and debtors in diverse industries including:
- Charitable and Religious Organizations
- Energy
- Finance
- Food/Agriculture
- Healthcare
- Manufacturing
- Mining
- Professionals/Receiverships
- Real Estate/Construction
- Retail
- Retail/Entertainment
- Services
Professional Leadership:
One of our members chaired and two others were members of the committee that drafted the recently enacted (2012) Minnesota statutes governing receiverships and assignments for the benefit of creditors. Group attorneys are active as members of and leaders in a number of professional insolvency organizations, including the Business Bankruptcy Committee of the American Bar Association Section of Business Law, the American Bankruptcy Institute, the Turnaround Management Association (Upper Midwest Chapter), the Hennepin County Bar Association Debtor/Creditor Section, and the Minnesota State Bar Association, Bankruptcy Section. In addition to holding leadership positions in these organizations, two of our attorneys are also co-instructors of the Bankruptcy Clinic at the University of Minnesota Law School; one is a nationally Certified Business Bankruptcy Specialist and two are Fellows in the American College of Bankruptcy.
Experience
The Bankruptcy, Reorganization & Workouts Group represents creditors and debtors in diverse industries. See below for a list of recent representations in various industries.
Manufacturing |
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HEI, Inc. |
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Industry/business: |
Printed circuit board manufacturer |
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Representation/date: |
Debtor / 2015 |
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Transaction size: |
Approximately $30M of revenue |
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Key outcome: |
Successful auction, which increased price by 50% over stalking horse bid |
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Rotonics Manufacturing, Inc. |
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Industry/business: |
Manufacturer and marketer of plastic products |
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Representation/date: |
Debtor / 2012 |
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Transaction size: |
Revenues of approximately $50M |
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Key outcome: |
Successful out of court sales of manufacturing facilities with approval of constituents through assignment for the benefit of creditors |
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Genmar Holdings, Inc. (and 21 subsidiaries) |
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Industry/business: |
One of world’s largest boat manufacturers |
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Representation/date: |
Debtor / 2009-2010 |
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Transaction size: |
Prior company revenues of over $1B |
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Key outcome: |
Sale of business assets as going concern to several buyers. Turnaround Management Association Upper Midwest Chapter Transaction of the Year 2010 |
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PVC Compounders, Inc. |
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Industry/business: |
Manufacturer of flexible and rigid polyvinyl chloride components |
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Representation/date: |
Debtor / 2009 |
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Transaction size: |
Revenues of approximately $50M |
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Key outcome: |
Successful out of court sales of manufacturing facilities with approval of constituents |
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(Precision manufacturer for defense industry) |
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Industry/business: |
Manufacturer of precision components and assemblies of metal products |
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Representation/date: |
Debtor / 2009 |
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Transaction size: |
Revenues of approximately $15M |
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Key outcome: |
Successful out of court sale of assets with approval of constituents |
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A.P.I. |
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Industry/business: |
Installer and distributor of fire proofing material/asbestos case |
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Representation/date: |
Debtor / 2008 completion |
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Transaction size: |
Revenues of approximately $62M / $250M plus in liabilities |
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Key outcome: |
API is the only confirmed asbestos Chapter 11 case in the Eighth Circuit (and among a small number of such cases nationally). The case involved a company which sold and installed asbestos insulation products and faced massive liability from product liability claims. The company was able to confirm a Chapter 11 plan involving a contribution to a trust and assignment of its remaining insurance and go forward as a successful business after reorganization |
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Victor Plastics, Inc. |
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Industry/business: |
Custom plastic molding for household appliance, automotive and other industries |
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Representation/date: |
Represented equity/creditor interests in sale of business assets in bankruptcy / 2008 |
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Transaction size: |
Revenues of approximately $81M / $15M in assets |
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Key outcome: |
Assisted investors in recovery of guaranty obligations in Chapter 11 asset sale |
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Hitchcock Industries |
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Industry/business: |
Aluminum foundry defense contractor |
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Representation/date: |
Debtor / 2006 |
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Transaction size: |
Revenues of approximately $42M / $45M in asset sale |
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Key outcome: |
Case recognized as “Transaction of the Year” in 2006 by the Upper Midwest Chapter of the Turnaround Management Association because the successful sale paid all creditors in full and paid amounts to the equity holders far in excess of what was expected |
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Dakota Arms |
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Industry/business: |
High end specialty firearms manufacturer |
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Representation/date: |
Debtor / 2006 |
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Transaction size: |
Revenues of approximately $4M / $4-5M in assets, with additional assumption of debt |
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Key outcome: |
Represented Chapter 11 debtor in extensive negotiations with creditors and litigation leading up to successful sale of assets of specialty gun manufacturer |
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Sheldahl |
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Industry/business: |
Manufacturer of high tech components to the automotive and aircraft industries |
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Representation/date: |
Debtor / 2004 |
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Transaction size: |
Revenues of $100M+ / $35M in assets |
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Key outcome: |
Chapter 11 plan confirmed with sale to existing equity to clean-up balance sheet and allow additional investment |
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BMC Industries |
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Industry/business: |
Manufacturer of aperture masks and lenses used in eyeglasses/Vision-Ease |
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Representation/date: |
Debtor / 2004 |
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Transaction size: |
Revenues of approximately $62M / $155M in assets |
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Key outcome: |
Represented debtor in obtaining bankruptcy court approval of $50M sale of Vision-Ease. Assisted in confirmation of a plan of liquidation resulting in payoff owed to service lenders |
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Sasol DHB Holdings, Inc. |
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Industry/business: |
Distribution of agricultural chemicals |
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Representation/date: |
Debtor / 2003 |
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Transaction size: |
$5M |
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Key outcome: |
Chapter 11 plan confirmed |
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BK Entertainment, Inc. and 3 Subsidiaries |
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Industry/business: |
Manufacture and sale of bingo products |
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Representation/date: |
Debtor / 2001-2006 |
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Transaction size: |
$100M plus |
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Key outcome: |
Chapter 11 plan confirmed |
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Other notable cases: |
Munsingwear, Inc. (chapter 11 plan confirmed), Endotronics (chapter 11 plan confirmed) |
Healthcare |
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Valley View of Jordan, LLC |
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Industry/business: |
Assisted living facility |
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Representation/date: |
Debtor / 2013-2014 |
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Transaction size: |
Approximately $5M of debt |
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Key outcome: |
Confirmed Chapter 11 Plan of Reorganization |
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Intrepid USA |
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Industry/business: |
National home health care business with 200 locations in 38 states |
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Representation/date: |
Debtor / 2004 |
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Transaction size: |
Revenues of $200M+ |
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Key outcome: |
Successful restructuring of business preserving 500 jobs; negotiated and led confirmation of Chapter 11 plan that resolved numerous stakeholder issues |
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Health Risk Management |
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Industry/business: |
Healthcare |
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Representation/date: |
Debtor / 2001 |
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Transaction size: |
Revenues of approximately $39M |
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Key outcome: |
Successful sale in bankruptcy of two separate businesses related to third-party payor services in health care industry |
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HMU |
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Industry/business: |
Chain of nursing homes in Wisconsin |
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Representation/date: |
Debtor / 2000 |
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Transaction size: |
Revenues of approximately $11M |
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Key outcome: |
Chapter 11 plans confirmed |
Energy |
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Fibrominn LLC |
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Industry/business: |
Electric power producer |
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Representation/date: |
Minnesota counsel to debtor in state receivership action / 2015 |
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Transaction size: |
Total debt of over $200 million |
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Key outcome: |
Sale of 55-megawatt biomass-fired power plant |
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NRG Energy |
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Industry/business: |
Non-regulated electric power producer |
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Representation/date: |
Local counsel for debtor / 2002 |
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Transaction size: |
Approximately $9B |
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Key outcome: |
Successfully obtained dismissal of involuntary bankruptcy petition filed by former officers; Company subsequently re-filed in New York and successfully reorganized approximately $9B in debt |
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(Minnesota Ethanol Plant) |
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Industry/business: |
Ethanol cooperative plant |
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Representation/date: |
Debtor / 2001 |
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Transaction size: |
$25M |
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Key outcome: |
Led team in renegotiating terms of construction and permanent financing of about $25M |
Mining |
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Eveleth Mines/Thunderbird Mining Co. |
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Industry/business: |
Taconite mine |
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Representation/date: |
Committee (local) / 2003 |
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Key outcome: |
Negotiated treatment of unsecured claims in sale of assets of large taconite mining operation |
Real Estate/Construction |
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Industry/business: |
Land developers, builders and lenders. We currently represent multiple distressed real estate industry clients in cases, including: developers, integrated builders, lumber yards/mill works, bank lenders and specialty construction lenders in workouts, foreclosures and bankruptcies related to the severe slump in residential real estate |
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Representation/date: |
Workouts, foreclosures and bankruptcies / Ongoing |
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Transaction size: |
Total of debt transactions exceeding $1B to date. |
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Lyman Lumber Company |
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Industry/business: |
Supplier of building materials and services, lender to builders and developer |
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Representation/date: |
Sale of assets in bankruptcy 363 sale/ 2011 |
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Transaction size: |
Revenue in excess of $400M in prior years; Total debt of more than $100M |
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Key outcome: |
Business sold as going concern with jobs saved and maximum value obtained for creditors |
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Gerald Trooien |
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Industry/business: |
Commercial Real Estate Developer |
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Representation/date: |
Debtor / 2010-2011 |
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Transaction size: |
Over 100 separate entities; $200M in debt |
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Key outcome: |
Confirmed Chapter 11 plan that permitted debtor to retain remaining assets and to share proceeds with creditors. One of Twin Cities Business Magazine’s Top Ten Business Litigation Cases of the Year (#3) 2011 |
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Fenton and Bowles (Pool D) |
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Industry/business: |
Owners of commercial real estate |
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Representation/date: |
Chapter 11/ 2011 |
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Transaction size: |
Approximately $13M in debt |
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Key outcome: |
Plan confirmed over objection of secured creditors (7/17/12) |
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Southside Lumber Company |
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Industry/business: |
Lumber yard and truss construction |
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Representation/date: |
Debtor / 2009 |
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Transaction size: |
Revenues of approximately $25M |
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Key outcome: |
Successful out of court sale of assets with over 25% distribution to unsecured creditors |
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Lyman Lumber Company |
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Industry/business: |
Largest supplier of building materials in Upper-Midwest, also in Pacific Northwest; finance to real estate industry and real estate development |
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Representation/date: |
Complex out of court workout/ 2007-2008 |
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Transaction size: |
Revenues of approximately $400M |
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Key outcome: |
2008 TMA (National) Transaction of the Year (mid-size). 2008 TMA Upper-Midwest Transaction of the Year |
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Lawrence A. Kreger |
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Industry/business: |
Real estate developer |
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Representation/date: |
Individual Chapter 11 case/ 2000-2003 |
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Key outcome: |
Chapter 11 plan confirmed |
Retail |
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Duke & King Acquisition Corp. |
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Industry/business: |
Burger King Franchisee with 92 restaurant locations |
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Representation/date: |
Minnesota counsel / 2010-2011 |
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Transaction size: |
Revenues of approximately $89M |
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Key outcome: |
Majority of restaurants sold as going concern in three regions to three buyers, confirmed Chapter 11 liquidating plan with anticipated 18-36% distributions |
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Wagstaff Minnesota, Inc. (and related entities) |
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Industry/business: |
Owner/operator of 77 KFC franchises |
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Representation/date: |
Minnesota counsel / 2011-2012 |
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Transaction size: |
Revenues of approximately $75M / Total debt of more than $60M |
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Key outcome: |
Pending Chapter 11 cases |
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2nd Swing |
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Industry/business: |
Retailer of new and used golf equipment |
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Representation/date: |
Debtor / 2007 |
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Transaction size: |
Revenues of approximately $63M / $9M in assets |
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Key outcome: |
Liquidation of national retail company in Chapter 11 case |
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Seasonal Concepts |
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Industry/business: |
Retailer of patio/garden furnishings and décor |
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Representation/date: |
Debtor / 2007 |
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Transaction size: |
Revenues of approximately $25M |
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Key outcome: |
Sale of assets in Chapter 11 case |
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Downtown Mall, LP and Center Development Venture (Southbridge Mall) |
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Representation/date: |
Debtor, Chapter 11 / 1997 |
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Transaction size: |
$20M |
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Key outcome: |
Chapter 11 plan confirmed |
Retail/Entertainment |
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(Family Entertainment Center) |
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Industry/business: |
Family center providing dining, event, bowling and other entertainment services |
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Representation/date: |
Debtor / 2012 |
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Transaction size: |
Revenues of approximately $10M |
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Key outcome: |
Successful restructuring of secured debts |
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(Hotel/Indoor Water Park) |
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Industry/business: |
Hotel and indoor water park |
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Representation/date: |
Debtor / 2011 |
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Transaction size: |
Revenues of approximately $15M |
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Key outcome: |
Successful restructuring of secured debts, including reduction in principal |
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Sierra Snowboards |
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Industry/business: |
Internet sale of consumer product |
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Representation/date: |
Represented purchaser of business engaged in internet sales of snowboards / 2010 |
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Transaction size: |
Approximately $7M |
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Key outcome: |
Client acquired valuable internet business in 363 sale conducted in bankruptcy court in California |
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Gold Rush I, LLC |
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Industry/business: |
Hotel and casino |
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Representation/date: |
Debtor / 2001-2002 |
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Transaction size: |
Revenues of approximately $7M |
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Key outcome: |
Chapter 11 plan confirmed |
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Underwater World |
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Industry/business: |
Aquarium in Mall of America |
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Representation/date: |
Debtor / 1998 |
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Transaction size: |
Revenues of $10-15M |
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Key outcome: |
Confirmed sale in Chapter 11 plan |
Food/Agriculture |
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(Family Farmers) |
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Industry/business: |
Farming operations on over 3,000 acres of land |
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Representation/date: |
Debtors / 2011 |
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Transaction size: |
Creditors with claims of approximately $15M |
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Key outcome: |
Chapter 11 plan confirmed |
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General Mills, Inc. |
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Industry/business: |
Food manufacturer |
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Representation/date: |
Creditor / Reclamation, preference defense, setoff, and other claims in large Chapter 11 cases (Fleming Foods and others) |
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Key outcome: |
Work with food manufacturer, often in conjunction with other large trade vendors, to protect and realize on multimillion dollar reclamation claims, setoffs, and unsecured claims, and to defend against preference actions by debtor or trustee |
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Kemps/Marigold |
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Industry/business: |
Dairy food manufacturer |
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Representation/date: |
Creditor / Reclamation, preference defense, setoff, and other claims in large Chapter 11 cases (Fleming Foods and others) |
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Key outcome: |
Work with food manufacturer, often in conjunction with other large trade vendors, to protect and realize on significant reclamation claims, setoffs, and unsecured claims, and to defend against preference actions by debtor or trustee |
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M.A. Gedney Company |
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Industry/business: |
Food manufacturer |
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Representation/date: |
Committee / 2002-2004 |
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Transaction size: |
Revenues of approximately $24M |
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Key outcome: |
Chapter 11 plan confirmed |
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Tri-Valley Growers |
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Industry/business: |
Large California cooperative grower of tomatoes |
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Representation/date: |
Represented investment banker in employment and fee payment issues/ 2004 |
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Key outcome: |
Obtained approval of client employment and payment of success fee upon multimillion dollar sale of grower assets |
Services |
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We have developed special knowledge and experience regarding professional fees in Chapter 11, and have represented investment banks, private equity funds, venture funds and other professionals in bankruptcy courts across the country. |
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SCICOM Data Services, Ltd. |
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Industry/business: |
Data management |
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Representation/date: |
Debtor / 2013-2014 |
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Transaction size: |
Approximately $15M of revenue |
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Key outcome: |
Sale of operating assets to industry competitor |
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Great Lakes Quick Lube |
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Industry/business: |
Auto service/ franchisee/operator of 100+ rapid oil change facilities throughout the Midwest |
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Representation/date: |
Debtors / 2012 |
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Transaction size: |
Revenues of approximately $30M |
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Key outcome: |
Sale of 30+ facilities to fund successful Chapter 11 reorganization |
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Fire Suppression Services |
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Industry/business: |
Designer and installer of fire suppression services, focusing on large new-construction commercial projects |
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Representation/date: |
Debtor / 2010 |
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Transaction size: |
Revenues of approximately $25M |
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Key outcome: |
Successful out of court restructuring of secured debt |
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PGI Companies and PGI Fulfillment, Inc. |
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Industry/business: |
Printing, personalization, and distribution of direct mail |
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Representation/date: |
Debtor / 2009-2010 |
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Transaction size: |
Revenues of approximately $15M |
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Key outcome: |
Chapter 11 plan confirmed |
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Ciprico, Inc. |
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Industry/business: |
Software and hardware computer storage business |
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Representation/date: |
Debtor / 2008-2009 |
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Transaction size: |
Revenues of approximately $9M / $5-10M |
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Key outcome: |
Sales in Chapter 11 case |
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Rider Bennett, LLP |
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Industry/business: |
Leading Minnesota law firm |
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Representation/date: |
Chapter 11 case/ 2007-2008 |
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Key outcome: |
Chapter 11 liquidating plan confirmed |
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ACRO Business Finance Corp. |
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Industry/business: |
Asset based lender |
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Representation/date: |
Chapter 11 case/ 2006-2007 |
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Transaction size: |
$22M loan portfolios |
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Key outcome: |
Chapter 11 liquidating plan confirmed |
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Mesaba Airlines |
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Industry/business: |
Minnesota airline, affiliated with Northwest Airlines |
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Representation/date: |
Represented airline industry specialist consultants in employment and fee payment issues/ 2005-2008 |
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Key outcome: |
Obtained approval of client employment terms and payment of consulting fee upon debtor’s reorganization |
Professionals/Receiverships |
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Turnaround Professionals/Investment Bankers |
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Industry/business: |
Frequently represent receivers, assignees for benefit of creditors, investment bankers, and turnaround professionals |
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Transaction size: |
Ranging from $1M in assets to $100M in assets |
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Chapter 7 Trustee, Genmar Holdings, Inc. (and subsidiaries) |
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Industry/business: |
Completion of liquidation of boat manufacturer |
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Representation/date: |
Represent Chapter 7 trustee in more than 400 preference cases/ 2011-2012 |
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Key outcome: |
Collection of funds for estate (amount not yet determined) |
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Minnesota Print Services, Inc. |
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Industry/business: |
(Fictitious) print broker business |
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Representation/date: |
Receiver / 2009 - 2011 |
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Transaction size: |
Creditors with outstanding claims of $50M |
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Key outcome: |
Recovered assets, instituted distribution plan, and made distributions to unsecured creditors of over 25% |
Finance |
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(International Financial Institution) |
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Industry/business: |
Financial institution that provided wholesale credit facility to retail lender in construction industry |
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Representation/date: |
Secured creditor / 2009-2012 |
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Transaction size: |
$400M+ credit facility |
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Key outcome: |
Had receiver appointed to liquidate collateral and recover fraudulent transfers |
News & Articles
Section 365(n) of the Code: The Intersection of Bankrupty and Intellectual Property
April 17, 2018
Are trademarks “intellectual property” under the Bankruptcy Code? According to a recent decision from the First Circuit Court of Appeals, the answer is “no,” and Section 365(n) of the Code does not offer protection to trademark licensees when the licensor files for chapter 11.
Read MoreWould you (Still) Qualify for this Narrowed Safe Harbor from Clawback Claims?
April 17, 2018
In its recent Merit Management decision, the Supreme Court narrowed the “securities” safe harbor for fraudulent transfer and other avoidance actions. Read about that case, and the impact it may have on how transactions are structured or on litigation strategy when a clawback action is commenced.
Read MoreNavigating Disputed Chapter 11 Trustee Elections
April 17, 2018
The choice of a chapter 11 operating trustee can provoke a fight. Follow this guide for a smooth path through the process of displacing an interim chapter 11 trustee or challenging an election.
Read MoreAttorney James Baillie Elected Vice President of the American College of Bankruptcy
March 26, 2018
Attorney James L. Baillie has been elected to serve a two-year term as vice president of the American College of Bankruptcy.
Read MoreHave You Evaluated Your Corporate Indemnification Obligations Lately?
January 10, 2018
State statutes and corporate organizational documents can impose substantial obligations on companies to indemnify their officers and directors in certain situations.
Read MoreSafe Harbor for Forward Contract Merchants Creates Stormy Waters for Energy and Farmer Debtors
January 10, 2018
In addition to the normal hurdles debtors face in chapter 11 cases, many energy and farmer debtors must address the safe harbor provisions of 11 U.S.C. § 556, which permit forward contract counterparties to terminate forward contracts immediately after a bankruptcy filing.
Read MoreMission vs. Creditor Interests: Nonprofit Directors’ Fiduciary Duties
December 1, 2017
Many people act on their desire to make the world a better place by serving on boards of directors of nonprofits. Like their counterparts at for-profit institutions, nonprofit directors’ service comes with responsibilities—fiduciary duties.
Read MoreFredrikson & Byron Wins Turnaround Management Association’s 2017 Turnaround of the Year Award
November 16, 2017
Fredrikson & Byron won the 2017 Turnaround of the Year Award from the Turnaround Management Association (TMA) for the successful Chapter 11 plan of reorganization of Christ’s Household of Faith, a Christian commune of 500 members based in St. Paul, Minnesota.
Read MoreIs Jevic Really About Structured Dismissals?
October 3, 2017
The impact of Jevic may have a wide ranging impact on how Chapter 11 cases are administered in the future.
Read MoreThe Growing Use of Receiverships and Assignments for Benefit of Creditors
October 3, 2017
The new receivership and assignment for benefit of creditors statutes took effect in 2012.
Read More
