Unsecured Creditors‘ Committees

Seward & Kissel (“S&K”) represents creditors’ committees in connection with chapter 11 proceedings. Our representations have spanned numerous industries, including retail, hospitality/real estate, energy, food and beverage, shipping, and financial institutions, among others. In representing formal and informal committees, we have advised and advocated on behalf of clients regarding all aspects of restructurings, including operations, the scope of the automatic stay, debtor-in-possession financings, use of cash collateral, Rule 2004 discovery, D&O liability, avoidance and preference actions, 363 sales, and plans of reorganization or liquidation.

• A.B.C. Carpet Co., Inc. (A.B.C. Carpet & Home). S&K represented the official committee of unsecured creditors in the chapter 11 cases of A.B.C. Carpet Co., Inc. and its affiliates (collectively, “ABC”). While the future of this historic NYC retailer looked bleak at the onset of the cases, S&K used its know-how in the industry and leverage at its disposal to negotiate on behalf of unsecured creditors. S&K was able to help pave the way for a sale of substantially all of ABC’s assets to a stalking horse purchaser, which ensured that the ABC name would survive, while also preserving valuable liquidity and claims for the benefit of unsecured creditors. S&K conducted an investigation of potential claims by utilizing a robust and efficient discovery process on an expedited timeline. S&K then leveraged the information uncovered from its investigation to negotiate a consensual resolution to its objections to the sale.
• SC SJ Holdings, LLC (San Jose Fairmont). S&K represented the official committee of unsecured creditors in the chapter 11 bankruptcy cases of SC SJ Holdings, LLC (San Jose Fairmont) and its affiliate (collectively, the “SC SJ Debtors”). The SC SJ Debtors owned the luxury hotel and conference center formerly known as the Fairmont San Jose (the “Hotel”) and sought bankruptcy protection in March 2021 with more than $185M in debt and an uncertain future given the pandemic’s effect on travel and lodging. The Debtors entered chapter 11 with a restructuring support agreement with their senior lender and the intention of replacing their existing brand manager, Fairmont Hotels (owned by Accor SA), with a de minimis commitment to fund a recovery to unsecured creditors (estimated between 0% and 2% on their claims). After extensive and hard-fought litigation and negotiations with the Debtors and their ownership, including two successful challenges to approval of the Debtors’ Disclosure Statement, which shifted leverage and extended the Debtors’ rushed case timeline, S&K was able to increase the recovery for unsecured creditors under the proposed plan of reorganization to 25%. S&K also worked with the Debtors to ensure administrative solvency and implement fair and efficient hotel marketing procedures for the procurement of a new contract for branding and management of the Hotel. These efforts resulted in a new hotel management agreement between the Debtors and a Hilton affiliate, which provides unsecured creditor vendors with a reputable go-forward entity to continue business relationships with.
• Furniture Factory Ultimate Holding, L.P. (Furniture Factory Outlet). S&K represented the official committee of unsecured creditors in the chapter 11 bankruptcy cases of Furniture Factory Ultimate Holding, L.P. and its affiliates (collectively, “FFO”). After filing robust objections to FFO’s Sale Procedures Motion and DIP Financing Motion, S&K was able to negotiate a resolution favorable to unsecured creditors that provided significant funding to the Committee to pursue an investigation and to provide a recovery to creditors. When the cases were filed, no recovery was expected. The chapter 11 plan, which S&K worked with FFO to draft, implemented a liquidating trust for the purpose of resolving claims and making distributions, including potential claims discovered by S&K during its investigation of FFO’s private equity sponsor, which will be administered by and for the benefit of unsecured creditors.
• PQ NY, Inc., (Le Pain Quotidien). S&K represented the official committee of unsecured creditors in the chapter 11 bankruptcy cases of PQ New York, Inc. and its affiliates (the “PQ Debtors”), owners and operators of U.S.-based restaurants operating under the Le Pain Quotidien brand, sought bankruptcy protection in May 2020 with more than $100 million in debt and a grim road ahead due to the pandemic. Through the efforts of the PQ Debtors, one of New York City’s largest independent restaurant operators (the “Purchaser”)), and the committee, the Debtors narrowly avoided a chapter 7 liquidation, were able to sell much of the business as a going concern, and confirmed a chapter 11 plan. The Purchaser assumed over 40 leases and resumed restaurant operations under the Le Pain Quotidien name, preserving jobs and value for many landlords. S&K maximized value available to unsecured creditors through extensive negotiations with the Purchaser, which led to a nearly 25% increase in the purchase price and the preservation of certain claims for the direct benefit of unsecured creditors.
• Schurman Retail Group (Papyrus). S&K represented the official committee of unsecured creditors of Schurman Retail Group, better known as the operator of Papyrus retail locations. The Debtors operated more than 256 locations in the U.S. and Canada. S&K negotiated a favorable cash collateral order for the benefit of unsecured creditors, preserving potential causes of action against controlling parties. S&K also conducted an investigation relating to potential estate causes of action and negotiated a favorable settlement of those prospective claims with the company’s former equity sponsor.
• Suniva, Inc. S&K represented the official committee of unsecured creditors in the unique chapter 11 cases of a solar energy company seeking trade protection from the United States International Trade Commission. S&K worked to protect the interests of unsecured creditors in connection with DIP financing, litigation initiated against the estate by the secured lender, and an eventual plan of reorganization.
• Gracious Home LLC. S&K represented the official committee of unsecured creditors in the chapter 11 cases of an iconic New York city home goods retailer. S&K took action to protect the interests of unsecured creditors in connection with debtor-in-possession financing, the sale of substantially all of the debtors’ assets and the investigation of estate claims and causes of action. Claims were ultimately brought against the debtors’ equity holders and settled for the benefit of creditors.
• TMT Procurement Corporation. S&K was co-counsel to the official committee of unsecured creditors in the highly contested chapter 11 bankruptcy cases of a shipping company. S&K represented the interests of unsecured creditors with respect to the debtors’ use of cash collateral and DIP financing, restarting and deploying the debtors’ fleet, and when a reorganization was no longer possible, a structured liquidation of assets through worldwide 363 vessel sales.
• North Texas Bancshares, Inc. S&K represented the official committee of unsecured creditors in the chapter 11 cases of bank holding companies. The majority of unsecured indebtedness consisted of trust preferred securities issued to investors. S&K played a pivotal role in obtaining an increased sale price for substantially all of the debtors’ assets, which directly benefited unsecured creditors.