Distressed Situations

• Financial crisis planning
• Strategic opportunities
• Financing alternatives
• Restructuring for future growth

The Gibbons Corporate Department has established the Distressed Situations Group to advise clients in distressed or opportunistic situations. The Group utilizes our broad experience to provide our clients with effective and efficient legal advice. We carefully balance the need to provide the highest level of time-critical, legal advice with client economics by assigning appropriately experienced attorneys to a given matter to maximize value for our clients.

Over the years, Gibbons has counseled many businesses and their owners on financial crisis planning, realizing strategic opportunities, negotiating financing alternatives, and working through ownership and management issues arising out of economic distress and financial crisis. Our firm also employs attorneys who are experienced as business owners and managers, which enables us to better understand the unique challenges and opportunities that distressed situations pose. Our experience and knowledge in representing all sides and viewpoints in distressed situations, on behalf of creditors, debtors, and sellers and buyers, creates valuable perspective and facilitates smooth negotiations and closings.

Gibbons’ leading transactional experience, coupled with our strong relationships and experience with investment bankers, restructuring firms, private equity investors, corporate buyers and sellers, and other potential investors and purchasers, enable us to guide clients through achievable transactions, even during today’s difficult economic conditions.

Unique benefits and services offered by the Gibbons Corporate Department Distressed Situations Group include quick and ready access to experienced attorneys in the following matters:

Financial Crisis Planning

• Advise in obtaining relief from creditors and guarantees, and obtaining protection with contracts, and the defense of lawsuits
• Advise in distressed and non-distressed, friendly and non-friendly, creditor situations to protect companies, and their officers, directors and shareholders; advise lenders and borrowers with loan workouts, restructurings, and forbearances; obtain and enforce judgments; and locate and identify assets
• Advise and protect guarantors of loans, leases, and other financial obligations
• Advise in contract disputes and re-negotiations, modifying and enforcing contractual rights and third party beneficiary rights in insolvency situations; advise regarding supply agreements, purchase agreements, licensing arrangements, leases (equipment and real property), joint venture, and other arrangements
• Advise in connection with business streamlining and downsizing, including workforce reduction, lease terminations, supply contract rescission, and future commitment reductions; minimizing related risks and liabilities

Strategic Opportunities

• Acquisition of specific assets, or the entire business, of a distressed company, including use of traditional M&A techniques, §363 bankruptcy sales, acquisition of debt of distressed companies, and secured party sale transactions
• Management agreements designed to turn around a troubled company with rights to acquire the company when restructured
• Recapitalization plans using strategic debt and equity investments providing for control positions to opportunistic investors

Financing Alternatives

• Utilize our strong financial market relationships to introduce clients to sources of capital
• Advise in connection with private equity, venture capital, angel investing, investment banking, financial advisory, and other financial services transactions
• Advise in negotiation, documentation, and closing of secured and unsecured commercial loans, debt restructuring, leveraged leasing and asset-based financing, guarantees, commercial standby letters of credit, and other credit enhancement situations; extensive experience in handling commercial loans in the middle-market (loans of roughly $5 million - $150 million) for a broad range of lenders as well as advising mid-market borrowers

Ownership Issues

• Advise shareholders, partners, and members of closely-held, middle market businesses and family businesses in intra-owner disputes; advise in connection with disputes in a crisis environment, including interpretation and enforcement of shareholder partnership and operating agreements, forced sales, and company restructurings

Industries Represented

• Service organizations, manufacturers, distributors, retailers
• Financial institutions, financial services companies
• Private investment companies, private equity groups, hedge funds, holding companies, real estate investment groups
• Real estate developers, construction firms, investment and management companies
• Technology companies, including biotechnology and computer software and equipment
• Pharmaceutical companies and pharma industry-related businesses
• Telecommunications
• Health care providers and health care management
• Transportation
• Gaming/casinos
• Energy/investment funds and energy projects

Select Distressed Prior Representations

• Represented distressed manufacturing company and its shareholders in its asset sale to strategic buyer, including simultaneous negotiation with the company’s secured and unsecured creditors, resulting in discounted loan payoff to company’s primary lender and distribution to shareholders
• Represented investor group in its purchase of distressed 25 store retail chain from strategic seller, including establishment of new asset bank loan credit facility
• Represented shareholders by negotiating a discounted payment of first lien debt and sale of distressed manufacturing business
• Represented corrugated box manufacturer in connection with liquidation of assets and settlement of liabilities outside of a bankruptcy proceeding
• Represent lender in all of its loan workout transactions
• Represented shareholders and company in secured party sale of manufacturing business to strategic buyer
• Represented $800 million distributor and its shareholders in its sale to distressed investment fund
• Represented manufacturer in its strategic acquisition of distressed supplier in Southeastern U.S.
• Represented $20 million importer/distributor in workout/renegotiation and restructuring bank debt
• Represented purchaser in unwind of unsuccessful business acquisition
• Represented institutional investor in its $400 million investment in distressed global bank
• Represented large organization in restructuring credit swaps with distressed insurer following 2008 credit markets crisis
• Represented early stage telecomm issuer in $10 million preferred stock “down round” financing
• Represented borrower in $3 million bridge loan from industry insiders
• Represented distressed telecom company in its $8 million asset sale
• Represented early stage biotech issuer in $10 million “down round” equity financing transaction
• Provided securities advice to activist hedge fund investor
• Represented opportunistic investor in its purchase of distressed consumer electronic distributor including arranging new asset based credit facility
• Represented early stage pharmaceutical company issuer in $14 million “down round” financing
• Represented stockholders in “squeeze-out” litigation
• Represented issuer in substantial issuer bid - Canadian equivalent to tender offer in US
• Represented joint venture partner in purchase of $600 million distressed real estate portfolio
• Represented opportunistic investors in acquisition of various national and regional retail store chains (e.g., sporting goods, men’s apparel, general department store, auto parts and accessories, women’s casual clothing, shoes and cosmetics, some of which involved successful bankruptcy reorganizations)