Bankruptcy - Davis+Gilbert LLP

Creditors dealing with bankruptcy and insolvency situations turn to our attorneys to develop and implement strategies for protection and enforcement of their interests. We have broad experience resolving debtor-creditor disputes under federal and state law, across all industries, and particularly in the marketing communications, real estate and financial services sectors, where we are often called on to enforce protective strategies we previously put in place as part of initial deal structures. When counterparties or borrowers in bankruptcy attempt to avoid and recover transfers — including by way of preferential transfer and fraudulent transfer claims — our industry-specific know-how allows us to pursue the most effective course for resolution, whether through settlement or defense of litigation.

Understanding Media Liability

When advertisers become insolvent or file for bankruptcy relief, advertising agencies and other intermediaries can be left with significant obligations to third parties — such as for media purchases — on behalf of their clients. Distressed advertisers and other principals can also be faced with competing claims to their assets and uncertainty as to their priority. The firm’s deep knowledge of the marketing communications space often proves decisive in protecting our clients and working through favorable solutions. Our long experience with the law of agency and “sequential liability” — a concept unique to the advertising business — affords us a real advantage in negotiating global settlements among advertisers, agencies, media vendors and other third parties.

Resolving Commercial Tenant Bankruptcy Issues

As economic distress takes its toll on retailers and other establishments, clients rely on our broad understanding of both the commercial leasing market and the give-and-take of landlord-tenant dispute resolution. Our clients’ distressed commercial tenants often occupy spaces in attractive locations and don’t wish to liquidate, but their circumstances force them to seek rent reductions or other lease modifications to remain in business. While the Bankruptcy Code provides bankruptcy tenants with a breathing spell and negotiation leverage, we are able to maximize recoveries for our landlord clients by understanding the special protections afforded commercial landlords under the Bankruptcy Code — the rights of creditors generally — and by enforcing such protections and rights, either through litigation or settlement.

Developed a proprietary strategy to limit a marketing communications intermediary's legal exposure to media and other third parties when its clients became insolvent and the threat of preference liability loomed. This strategy has since been implemented on numerous occasions to save intermediaries hundreds of millions in situations where their clients have not paid them or have sought to claw back funds in bankruptcy.
Guided an international real estate investment firm in chapter 11 bankruptcies of its retail tenants during the COVID-19 pandemic. Maximized the client's recoveries by enforcing its rights as a commercial landlord under the Bankruptcy Code and participating in negotiations concerning unprecedented rent relief during government shutdowns. The ultimate resolution balanced the retail tenants' need for rent relief during the shutdowns and the client's right to collect right during the bankruptcies. This resolution created a framework to deal with future disputes and commercial tenant insolvencies during the pandemic.
Guided an advertising agency in connection with an advertiser's chapter 11 bankruptcy proceeding and negotiated global resolution of dispute with various media vendors. The resolution preserved our client's business model and its role as an agent in connection with media buying.
Advising a prominent French space sharing company in chapter 11 bankruptcy of Knotel Inc. Preserved the client’s rights under pre-bankruptcy subscription agreements and negotiated favorable resolutions concerning the sale of the client’s equity.
Represented a prominent jewelry designer in connection with its purchase of intellectual property through a “363 sale” in a chapter 11 bankruptcy.
Represented an investor in connection with the acquisition of a $170M DOJ loan to an U.S. electric automobile manufacturer and the subsequent bid to acquire the U.S. manufacturer's assets in its chapter 11 bankruptcy case.