Business Restructuring & Bankruptcy

2016 Tier One Firm
     - "Best Law Firms" by U.S. News & World Report &
Best Lawyers®

Sussman Shank is nationally recognized as one of the Pacific Northwest's leading law firms in troubled company restructuring and insolvency matters.  We have experience dealing with financially distressed entities in matters throughout the country, including serving as lead counsel in some of the largest, most complex restructuring and insolvency cases on the West Coast.

We represent troubled companies and individuals, lenders, creditors, equity holders, and investors in both formal and informal restructuring situations.  We also represent creditors' committees, trustees, receivers, turnaround managers, and other professionals involved in restructurings and liquidations.

When cases call for it, we draw upon our expertise in banking, business, corporate, environmental, real estate, tax, and litigation.  This allows us to guide clients through complex Chapter 11 cases and restructurings with seamless integration.

Each partner in our practice group has over 25 years experience and is AV® Preeminent™ rated by Martindale-Hubbell.  All have been selected as Super Lawyers® in Bankruptcy and Creditors' Rights.

Our areas of expertise include:

  • Adversary proceedings in bankruptcy court
  • Agriculture liens and insolvency
  • Asset sales
  • Asset value litigation
  • Arbitration and mediation
  • Assignments for the benefit of creditors
  • Bankruptcy trustee representation
  • Bankruptcy claim resolution
  • Business and financial restructuring
  • Business termination and liquidation
  • Chapter 7, 11, and 12 creditor and debtor representation
  • Chapter 13 creditor representation
  • Contested plan confirmation issues
  • Creditors' committee representation
  • Discharge litigation
  • Divorce issues in bankruptcy
  • Lender representation
  • Out-of-court workouts

Representative Work
Archdiocese of Portland in Oregon
We served as lead counsel to the Archdiocese of Portland in the first Chapter 11 bankruptcy case filed by a Roman Catholic diocese in the United States.  We developed and implemented a strategy that considered the interplay of First Amendment religious rights, charitable trust, and bankruptcy law in proposing and confirming a reorganization plan that resulted in the settlement and payment of over 250 known clergy sex abuse claims, provided a trust for the liquidation and payment of future abuse claims, and preserved the assets and operations of 124 parishes and three Catholic high schools.

Bankruptcy Litigation Involving Electrical Co-Ops
We recovered virtually the entire amount requested in a lawsuit filed on behalf of an Oregon bankruptcy trustee against an Oregon electric cooperative alleging breach of fiduciary duty and breach of bylaws. We argued the bankruptcy trustee had a right, as successor to the debtor-cooperative member's interest, to obtain payment of its capital contributions on an accelerated basis under a bylaw provision permitting distributions upon the "death" of a member. This was a case of first impression in the District of Oregon. We argued on behalf of the trustee that a Chapter 7 corporate debtor is "dead" for purposes of entitlement to distributions upon the death of a member. Based on this result, we have been retained and have successfully negotiated resolutions in two other cooperative cases. A third case is pending.
Camera World
Represented the assignee for the benefit of creditors of a major in-store and website camera retailer in two multi-million dollar sales of the company's assets.  Prepared the formal asset assignment agreement and sale documents, and handled creditor-related claim and payment issues.  All secured and priority claims were paid in full, with unsecured creditors receiving a large percentage of their claims through an earn-out.
Consolidated Freightways Corporation
This was one of the largest and most complex Chapter 11 cases filed by a freight company in the United States.  We represented the company in liquidating the company's assets and resolving thousands of claims.  Although our offices are located in Portland, Oregon, we were able to provide these services to a debtor whose bankruptcy case was being administered in the Central District of California.
Cottage Grove Community Hospital
We represented an ad hoc committee of community leaders in this Chapter 11 case, whose goal was to ensure that the citizens of Cottage Grove, Oregon, did not lose local access to emergency and acute medical care.  Our involvement in the case ensured that the community's concerns were met, ultimately resulting in Peace Health, a major health care provider organization, agreeing to erect a new community medical center to address the citizens needs.
Creditors' Plan
Sussman Shank successfully represented a governmental entity as a creditor in a Chapter 11 bankruptcy case that allowed our client to prepare a plan through which it purchased a failed construction project out of bankruptcy. We were able to arrange for the purchase of the project free and clear of liens, which eliminated a large number of construction liens against the project. As a result, the project was sold and work was restarted on the project.
Debtor/Creditor Litigation
We were hired to collect $1.3 million owed by the purchaser of a large machine.  We examined the paperwork and discovered, to our client's surprise, that our client had recourse against the manufacturer.  We made demand on the manufacturer and recovered the whole $1.3 million for our client.  The manufacturer retained us shortly thereafter.
Dismissal of Abusive Filings
We obtained three dismissals with prejudice of Chapter 13 cases on grounds of abuse of the bankruptcy laws after contested hearings. These cases involved repeat filers who had no intention of reorganizing. In one matter, the court barred the debtor from filing any type of bankruptcy for two years. This permitted the creditor (a county tax collector) to commence and continue with long-frustrated foreclosure proceedings.
Increased Interest Rate
In a precedent-setting decision in the Bankruptcy Court for the District of Oregon, we established the market rate of interest for unpaid ad valorem real property taxes at 15%, only one percentage point lower than the Oregon statutory rate. Counties had typically recovered less than 10%. We introduced expert testimony to establish the market rate for a Chapter 13 debtor. This precedent has endured for the last two years.
Mediation
We initiated a mediation process in the Bankruptcy Court for the District of Oregon which resolved issues in three related bankruptcies and several adversary proceedings pending in three different Bankruptcy Courts in the Western District of Washington. This resulted in a settlement which requires payment in full of a debt owed to the client of over $2 million.
North Pacific Group of Companies
Served as lead counsel to the federal court receiver appointed to liquidate the assets of the North Pacific debtor companies.  Our attorneys, Barry Caplan and Jeff Misley, led a team that promptly sold the company's major assets, paid its secured creditors in full within weeks of the receiver's appointment, and implemented a further liquidation strategy for the remaining assets and for distributions to creditors.
Objection to Plan
We obtained an Order for Relief after filing an involuntary bankruptcy petition on behalf of a creditor against a Willamette Valley real estate developer. The case proceeded as a Chapter 11 in the Eugene Division of the Oregon Bankruptcy Court. We objected to confirmation of Debtor's Chapter 11 Plan. After a contested hearing, we obtained an Order denying confirmation and converting the case to a Chapter 7 proceeding. This was accomplished expeditiously, within approximately one year of the petition date.
Preference Litigation
We represent a client who is often sued for preferential transfers. As a result of our 10+ years of representation of this client, the client accepted an offer to settle "all preference claims" for about $2,000. Subsequently, the debtor made demand for additional sums from the client (approximately $1 million based on additional preferential transfers later discovered by the debtor). We successfully defended the trustee's larger claim, and the debtor ultimately dismissed its claim with no additional payment from the client.
Purchasing Assets Through Bankruptcy
Represented a well-known Oregon company who desired to purchase assets and Portland-area locations of a well-known Chapter 11 debtor. There were competing bidders from two other states. The combined bids of our client and one other party were greater than the single bid from two out-of-state bidders, each of whom wanted all of the locations of the debtor. Prepared pleadings to obtain appropriate bidding procedures to enable our client to "partner" with another interested party from Oregon. Client was successful in obtaining the highest bid at an auction for the assets the client wanted.  Prepared or approved all of the necessary documentation to finalize the sale of those assets. Success of our efforts enabled the acquisition of the operations synergistic to our client's existing business.
Recovery of Secured Lender's Claim
We represented a lender whose $650,000 loan balance was collateralized by health equipment lease receivables. The lease portfolio was not performing well, and the borrower was not paying the bank according to loan terms. Initially, we helped prepare and negotiate a Forbearance Agreement. We also defended a lawsuit against the bank by the borrower and successfully obtained dismissal. We later filed a lawsuit on behalf of the lender upon default under the Forbearance Agreement. We obtained immediate "possession" of the leasehold receivable collateral at a provisional process hearing and obtained an order appointing a receiver to collect the leasehold receivables. The bank recovered the full amount of the debt and most of its attorney fees and costs.
Refusal of Preference Claim
Sussman Shank represented a publicly-held company in a bankruptcy pending in the Southern District of New York. Knowing our client had preference exposure of $5 million, we negotiated assumption of a contract between our client and the debtor. As a result, most of the pre-petition default was paid, the debtor paid our client for services provided post-petition, and the client received an administrative expense claim (essentially elevating its claim from a pre-petition unsecured claim). In addition, we defeated the subsequent preference claim based on case law prohibiting the debtor from pursuing a preference claim from a creditor whose contract has been assumed.
Removal of Adversary Proceedings to "Home Turf"
In a large international Chapter 11 bankruptcy pending in the District of Delaware and Canada, Sussman Shank successfully obtained an order transferring venue of an adversary proceeding filed in Delaware, by the debtor, against Oregon residents to the Bankruptcy Court in Oregon. This was a contested matter involving interpretation and enforcement of contract documents between the debtor and the Oregon residents, which contained forum selection provisions. Filing the action in Delaware was contrary to the contract documents signed by the debtor, and the only connection with Delaware was that the debtor filed bankruptcy there. Had venue not been transferred to Oregon, the cost of defending the action would have been prohibitive for the clients and could have resulted in causing one of the clients to file bankruptcy.
Representation of Governmental Entities for Bankruptcy
Sussman Shank successfully obtained payment of ad valorem tax claims in large Chapter 11 bankruptcy proceedings in multiple jurisdictions, including New York, Florida, Delaware, Colorado, California, Washington, and Oregon.
Society of Jesus, Oregon Province
This was the first Chapter 11 bankruptcy case filed by one of the provinces of a Roman Catholic religious order in the United States.  Relying on our experience from the Archdiocese of Portland case, and facing new issues relevant only to a religious order, we were able to implement a strategy for resolving and paying over 500 clergy sex abuse claims through the use of insurance coverage and other assets. This resulted in a plan that was overwhelmingly accepted by all creditors, which included $119 million in contributions from the debtor's insurers and allowed the province to continue its mission throughout Alaska, Idaho, Montana, Oregon, and Washington.
Successful Purchase of Chapter 11 Computer Consulting Company Assets
Sussman Shank LLP represented an out-of-state national company in its successful purchase, free and clear of liens, of assets from an Oregon-based computer consulting company that had filed Chapter 11.  We participated in negotiating the terms of the sale, which included overbid protections and provisions for expense reimbursement, and participated with the Debtor's attorney in the contentious evidentiary hearing on objections to the sale and possible competing bids.
Successful Purchase of Retail Stores' Assets in Boston Chapter 11 Case
Sussman Shank LLP represented an Oregon-based retailer who successfully purchased, free and clear of liens, 11 retail stores located in California from a Chapter 11 Debtor who had filed in Boston, Massachusetts.  We negotiated the terms of the sale, drafted the purchase agreement, assisted in negotiating new lease terms, addressed issues of successor liability, participated in the preparation of pleadings necessary to obtain court approval of the sale, and participated at the hearing in Boston that resulted in court approval of the sale.
Sunwest Companies
Represented a group of financial institution lenders in one of the largest and most complex Chapter 11 bankruptcy cases ever filed in the state of Oregon involving assisted living and nursing homes located throughout the United States.  Successfully asserted and protected our lender clients' rights and remedies regarding their collateral in the negotiation of a $1.2 billion sale of the companies' assets.
Talbitzer Homes/Hawks Prairie Chapter 11 cases
A major homebuilder in southern Washington engaged us to file a Chapter 11 petition when negotiations with one of his major secured creditors broke down and he was faced with imminent foreclosure of valuable assets.  A team from our Bankruptcy & Creditors' Rights and Litigation Practice Groups implemented a strategy that involved significant litigation concerning approximately $15 million in secured claims held by our client, negotiated settlements with the secured creditors in both bankruptcy cases, and restructured approximately $50 million of debt under two separate plans of reorganization.  This resulted in confirmation of a plan for our client that is expected to pay all of its creditors in full, provide the client with financing to complete the construction of homes in all of its subdivisions, and allow it to retain most of its other income-producing assets.
The Columbian Publishing Company
The major secured creditor of The Columbian daily newspaper in Vancouver, Washington, called upon us to represent it in a Chapter 11 bankruptcy case filed in the Western District of Washington.  We successfully negotiated the bank's treatment under a plan of reorganization that resulted in The Columbian surrendering its recently-built, state-of-the-art headquarters building to the bank in exchange for relief from a substantial portion of its unsecured debt.  This resulted in improved cash flow to the debtor, allowed the bank to liquidate a non-performing asset, and assured the bank of consistent future payments on its remaining secured debt.
Wind-Down of Business Operations
Represented a long-time Portland retailer at several locations in a year-long program involving reduction of operations and ultimately a going-out-of-business sale. Advised  client on steps to take which enabled all priority and secured debt to be satisfied. Successful in enabling company to satisfy secured debt (and, in turn, minimize individual owner's guaranty exposure to lender).