Supreme Court Report — Unsecured Claims for Post-Petition Attorneys’ Fees
Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co.
Relevant Background and Summary of Issues
Can an unsecured creditor recover from a bankrupt debtor the attorneys’ fees it incurs post-petition when its agreement with the debtor provides for such fees? That is the difficult question the Supreme Court recently considered, but ultimately failed to resolve, in the case of Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co., 127 S. Ct. 1199 (U.S. 2007).
Prior to the Supreme Court’s decision in Travelers, in the Ninth Circuit the answer to the forgoing question was an emphatic “no” under its Fobian rule. In re Fobian, 951 F.2d 1149, 1153 (9th Cir. 1991). The Fobian rule provided that an unsecured creditor could not recover any attorneys’ fees incurred while litigating issues “peculiar to federal bankruptcy law,” even if the agreement between the creditor and debtor expressly provided for the recovery of such attorneys’ fees in the bankruptcy context. Id.
Travelers’ pre-petition indemnity agreements with Pacific Gas & Electric Company (PG&E) expressly provided for the recovery of such fees, and in PG&E’s chapter 11 case the bankruptcy court approved a stipulation stating, among other things, that Travelers could assert a general unsecured claim for attorneys’ fees against PG&E. When Travelers filed an amended claim for such fees, PG&E objected by invoking the Fobian rule. The bankruptcy court agreed with PG&E and disallowed Travelers’ indemnity claim for attorneys’ fees, finding that the fees claimed were incurred litigating only bankruptcy-related issues. The district court and the Ninth Circuit both affirmed the bankruptcy court’s ruling.
Supreme Court Analysis and Holding
Presented with the opportunity to settle the question in Travelers, the Supreme Court declined to do so. Hamstrung by the limited arguments raised and addressed in the courts below, the Supreme Court focused its opinion on the providence of the Fobian rule as applied to claims allowance proceedings. The Supreme Court’s narrow holding declared the Fobian rule invalid on the grounds that the rule “finds no support in the Bankruptcy Code,” either under Section 502(b) (relating to the allowance of claims) or elsewhere, and was improperly created as a matter of federal common law. Travelers, 127 S.Ct. at 1205. The Supreme Court announced that federal bankruptcy law does not disallow contract-based claims for attorneys’ fees based solely on the fact that the fees were incurred litigating bankruptcy-related issues and reversed the lower courts’ disallowance of Travelers’ attorneys’ fees, but stopped short of resolve the basic question of whether such fees should be allowed under the Bankruptcy Code.
The Supreme Court remanded the case to the Ninth Circuit, “express[ing] no opinion with regard to whether, following the demise of the Fobian rule, other principles of bankruptcy law might provide an independent basis for disallowing Travelers’ claim for attorneys’ fees.” Id. at 1207-08. Most notably, the Supreme Court did not consider PG&E’s argument, which PG&E neither raised nor briefed in the courts below, that unsecured claims for attorneys’ fees like Travelers’ are categorically disallowed by Section 506(b) of the Bankruptcy Code. Section 506(b) expressly authorizes such fees “[t]o the extent that an allowed secured claim is secured by property [whose] value [exceeds] the amount of such claim.” 11 U.S.C. §506(b). By declining to analyze the question in light of Section 506(b) of the Bankruptcy Code or other applicable sections, the Supreme Court’s decision is inherently incomplete and fails to definitively resolve the issue of whether unsecured creditors, including Travelers, can be allowed post-petition attorneys’ fees provided for under pre-petition contractual fee provisions as an element of their claim.
Implications of the Decision
Until the Supreme Court resolves this issue, unsecured creditors with fee-shifting agreements or other contract-based claims for attorneys’ fees should be sure to include their post-petition attorneys’ fees and costs as an element of their unsecured claims. Unsecured creditors should also make themselves aware of the applicable standards for the allowance of attorneys’ fees and costs set forth in the Bankruptcy Code and local rules as well as those applied by bankruptcy courts to avoid inviting objections on reasonableness or other grounds.
Causes of Action Against Directors and Officers
North American Catholic Educational Programming Foundation, Inc. v. Gheewala, Cardinale & Daly, 2007 WL 1453705 (Del. May 18, 2007)
Relevant Background and Summary of Issues
Clearwire Holdings, Inc. (Clearwire) was in the business of creating a system of wireless connections to the Internet. In March 2001, North American Catholic Educational Programming Foundation, Inc. (NACEPF) and others in an “Alliance” entered into a Master Agreement with Clearwire (the “Master Agreement”). The Master Agreement provided that Clearwire would obtain rights to NACEPF’s radio wave spectrum licenses for $24.3 million.
In June 2002, WorldCom revealed its accounting problems, causing the collapse of the wireless spectrum market because of the surplus of spectrum available from WorldCom. Thereafter, Clearwire, which was in financial distress, paid $2 million to settle the claims of two other Alliance members who had entered into the Master Agreement, leaving NACEPF as the sole remaining member of the Alliance. Clearwire never paid what it owed to NACEPF and ultimately went out of business.
NACEPF filed a complaint in the Delaware Court of Chancery against three Clearwire directors (the “Directors”) who also worked for Goldman Sachs & Co. (Goldman Sachs), Clearwire’s main source of financing. The complaint alleged that the Directors knew but did not tell NACEPF that Goldman Sachs did not intend to provide necessary financing to Clearwire to carry out its business plan that was the stated rationale for asking NACEPF to enter into the Master Agreement.
Based on those allegations, the complaint sought damages for an alleged breach of the Directors’ fiduciary duties to NACEPF, a “substantial creditor” of Clearwire, while Clearwire was insolvent or in the “zone of insolvency.” NACEPF’s breach of fiduciary duty claim was a direct claim brought by NACEPF as a creditor of Clearwire rather than a derivative claim through Clearwire. NACEPF also sought damages from the Directors for fraudulent inducement and tortious interference with a prospective business opportunity.
The principal issues in the case were “whether, as a matter of law, a corporation’s creditors may assert direct claims against directors for breach of fiduciary duties when the corporation is either: first, insolvent or second, in the zone of insolvency.”
Court’s Analysis and Holdings
No Direct Claim for Creditors When the Corporation Is in the “Zone of Insolvency”
NACEPF argued that when a corporation is in the (undefined) zone of insolvency, the Delaware Supreme Court (Court) should recognize a direct right for creditors to assert claims against directors for alleged breaches of fiduciary duties. The Court disagreed, stating that while shareholders rely on directors as fiduciaries to protect their interests, creditors are afforded protection through contractual agreements, fraud and fraudulent conveyance law, implied covenants of good faith and fair dealing, bankruptcy law, general commercial law, and other sources of creditor rights. In the Court’s view, these safeguards make it unnecessary to empower creditors with the additional right to bring a direct breach of fiduciary duty claim.
The Court also remarked that it was important to provide “definitive guidance” to directors as to their duties of loyalty and care to the corporation. To provide that guidance, the Court opined that the focus for directors does not change while the corporation is in the zone of insolvency. The Court stated that “directors must continue to discharge their fiduciary duties to the corporation and its shareholders by exercising their business judgment in the best interests of the corporation for the benefit of its shareholder owners.” The Court thus held that a creditor cannot assert a direct claim against directors for breach of fiduciary duties when a corporation is in the zone of insolvency.
No Direct Claim for Creditors When the Corporation Is Insolvent
NACEPF also argued that when a corporation is insolvent, the Court should recognize a direct right for creditors to assert claims against directors for alleged breaches of fiduciary duties. The Court recognized that when a corporation is insolvent, creditors take the place of shareholders as the residual beneficiaries of any increase in value of the corporation. Accordingly, creditors of an insolvent corporation have standing to assert derivative claims against directors on behalf of the corporation for breaches of fiduciary duties.
The Court, however, refused to recognize a direct claim by creditors against directors of an insolvent corporation. The Court stated that recognizing that directors of an insolvent corporation owe direct fiduciary duties to creditors would create uncertainty for directors who have a fiduciary duty to exercise their business judgment in the best interest of the insolvent corporation. To recognize a new right for creditors to bring direct breach of fiduciary duty claims against those directors would create a conflict between the directors’ duty to maximize the value of the insolvent corporation for the benefit of all those having an interest in it, and the newly recognized direct fiduciary duties to individual creditors.
The Court also recognized the often-adverse relationship between individual creditors and the corporation, stating that directors must be able to engage in “vigorous, good faith negotiations with individual creditors for the benefit of the corporation,” without being concerned about being sued by such creditors for breach of fiduciary duties. The Court thus held that a creditor cannot assert a direct claim against directors for breach of fiduciary duties when a corporation is insolvent.
Implications of the Decision
The principal impact of the Court’s decision is that an aggressive individual creditor cannot attempt to appropriate the assets of an insolvent corporation for its sole benefit by bringing direct breach of fiduciary duty claims against directors. Rather, whether the corporation is in bankruptcy (and the claim is brought by a trustee or plan administrator), or outside of bankruptcy (and the creditor is forced to bring a derivative action that benefits all creditors), all aggrieved parties will be able to share in the fruits of any litigation against directors. In addition, the Court’s decision provides clear guidance to directors in Delaware that their fiduciary duties do not change when a corporation is in moderate or severe financial distress.
Analysis of Reclamation Claims Under BAPCPA
In re Dana Corp., 2007 WL 1199221, (Bankr. S.D.N.Y. Apr. 19, 2007)
Relevant Background and Summary of Issues
Dana Corporation and its related debtors (collectively, the “Debtors”) are manufacturers and suppliers of modules, systems, and components for original equipment manufacturers and service customers used in cars, vans, and trucks. In In re Dana Corp., 2007 WL 1199221, (Bankr. S.D.N.Y. Apr. 19, 2007), Judge Lifland considered the impact of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) on the rights of holders of alleged reclamation claims.
In Dana, over 450 parties (the “Claimants”) sent letters to the Debtors asserting reclamation claims in an aggregate amount of more than $297 million (the “Reclamation Claims”). The Debtors objected to the Reclamation Claims, alleging that such claims were valueless because they were subject to the superior rights of a holder of a security interest in those goods. In doing so, the Debtors relied on the plain language of Section 546(c), which provides that reclamation claims are subject to “the prior rights of a holder of a security interest in such goods and the proceeds thereof . . .” The Debtors also relied on the litany of cases that have held that a creditor may receive a reclamation claim on property subject to a valid lien only if the value of the inventory sought to be reclaimed exceeds the value of the amount of the floating lien on the inventory. See, e.g., In re Primary Health Sys., Inc., 258 B.R. 111 (Bankr. D. Del. 2001); In re Quality Stores, Inc., 289 B.R. 324 (Bankr. W.D. Mich. 2003).
The Claimants argued that the cases cited above were distinguishable for two reasons. First, the Claimants argued that BAPCPA created an independent federal right of reclamation. Second, the Claimants argued that the Reclamation Claims were not subject to prior liens. In support of this argument, the Claimants noted that the secured claims of the Debtors’ pre-petition lenders were paid in full by post-petition secured debt advanced under the Debtors’ debtor-in-possession financing facility (the “DIP Facility”).
Court’s Analysis and Holdings
No Federal Right of Reclamation
The Claimants argued that BAPCPA created an independent federal right of reclamation because amended Section 546(c) deleted the prior reference to the “statutory or common law right(s)” of the seller under state law. The Court disagreed for the following reasons:
- First, there is no “language of creation” evidencing that Congress intended to create a new federal right or scheme for reclamation. In fact, amended Section 546(c) remains a “Limitation on avoiding powers” — not a place where one would expect the creation of a groundbreaking new federal right.
- Second, when Congress amends the bankruptcy laws, it does not write “on a clean slate.” Dewsnup v. Timm, 502 U.S. 410, 419 (1992). The Court thus was unwilling to effect a major change in the Bankruptcy Code by recognizing a federal right of reclamation absent some discussion of that change in the legislative history.
- Third, the creation of a federal right of reclamation would result in reclamation creditors conceivably having rights that are superior to those of buyers in the ordinary course of business and lien creditors of the Debtors, a result that Congress could not have intended.
- Fourth, amended Section 546(c) provides that the rights of a reclamation creditor are subject to the “prior rights” of a holder with a security interest in the goods. The only available referent for those “prior rights” would be applicable state law.
Prior Lien Defense Valid
The Claimants next argued that the “prior lien” defense did not extinguish their reclamation claims. The Claimants noted that the secured claims of the Debtors’ pre-petition lenders were paid in full by post-petition secured debt advanced under the DIP Facility. Relying on In re Phar-Mor, Inc., 301 B.R. 482 (Bankr. N.D. Ohio 2003), the Claimants argued that the payment of the pre-petition lenders’ secured claims resulted in a release and extinguishment of any “prior lien” that may have trumped the Claimants’ reclamation rights.
The Court rejected the Claimants’ argument and the reasoning employed by the court in Phar-Mor. Relying on In re Dairy Mart Convenience Stores, Inc., 302 B.R. 128 (Bankr. S.D.N.Y. 2003), the Court held that the liens of the pre-petition lenders were “satisfied from the very goods being reclaimed,” as part of an integrated transaction. The Court reasoned that (a) the goods sought to be reclaimed were “paid” to the post-petition lenders through the granting of new liens on such goods, and (b) as part of the same transaction, the pre-petition lenders received payment from the post-petition lenders and released their liens. Thus, the reclaimed goods or the proceeds thereof were used to satisfy pre-petition liens, rendering the Reclamation Claims valueless.
Implications of the Decision
The notion that BAPCPA significantly liberalized reclamation rights is, at best, overstated. If the Dana decision is any indication, courts are likely to construe revised Section 546(c) narrowly and in accordance with pre-BAPCPA law, including with respect to the “prior lien” defense. Trade creditors usually will have to look elsewhere such as the expanded right to an administrative claim under Section 503(b)(9) of the Bankruptcy Code to enhance their priority status in chapter 11 cases.
Four Lessons From Refco
Salvatore A. Barbatano and Geoffrey S. Goodman
The chapter 11 cases of Refco, Inc. and its affiliates (together, “Refco”) pending in the United States Bankruptcy Court for the Southern District of New York are, collectively, one of the largest and most complex chapter 11 cases in history. While the bankruptcy court has analyzed and decided cutting-edge legal issues on a variety of topics, this article focuses on four key lessons that one can take from the Refco case.
Lesson #1 — A Thorough Review of Important Contracts Helps Avoid Expensive Bankruptcy Pitfalls
Perhaps more than any other case in history, the Refco case reinforces the importance of a thorough review of all significant contracts and other agreements for potential bankruptcy issues. This lesson is especially important in the securities, commodities, derivatives, and foreign exchange trading areas. Based on the testimony in contested hearings in the Refco case and other matters, it is apparent that many Refco customers did not consider: (a) The possibility that Refco could ever file bankruptcy; (b) the possible implications of a Refco bankruptcy on the treatment of their claims; and/or (c) possible strategies for enhancing their position in the event of a bankruptcy.
There are a number of issues that every customer should consider when entering into an agreement with a broker, dealer, futures commission merchant (FCM), or other counterparty to a securities, commodities, derivatives, or foreign exchange trade, including:
- Is my broker/counterparty a regulated or unregulated entity and how does that affect any requirements regarding how the broker/counterparty will hold the assets I will deposit?
- Does my customer agreement require my broker/counterparty to segregate the assets I will deposit and/or create a custodial relationship between the parties, or does it allow my broker/counterparty to pledge, hypothecate, or otherwise use my assets without further notice or consent?
- How will my claim be treated in the event of a bankruptcy by my broker/counterparty? Are there any special provisions in the Bankruptcy Code that may apply such as the “stockbroker” or “commodity broker” provisions in subchapters III and IV of chapter 7 of the Bankruptcy Code?
- What can I do before any bankruptcy is imminent to enhance my protections and the treatment of my claim in the event of a bankruptcy?
- Will my broker/counterparty secure a bank guarantee, letter of credit, or other security to enhance the protections for the assets I am depositing?
Analyzing these issues should allow a customer to evaluate the bankruptcy risk of entering into transactions with certain brokers/counterparties. In addition, making appropriate edits to its customer agreement based on such a review will likely result in higher recoveries for the customer when being involved in a bankruptcy becomes unavoidable.
Potential bankruptcy issues also should be considered before entering into significant contracts and agreements outside of the securities/derivatives realm. This is especially true for contracts and agreements that will result in long-term dealings with a counterparty, as the risk of dealing with an insolvency situation grows over time. A small amount invested in a pro-active analysis of potential bankruptcy issues under an agreement may save millions in potential losses after a counterparty files chapter 11.
Lesson #2 — Brokers, Dealers, FCMs, and Other Entities Executing Tradesfor Customers Must Make Full and Complete Disclosures
Brokers, dealers, FCMs, and other entities executing trades for customers should re-evaluate and amend their customer agreements in light of Refco. The bankruptcy court in Refco was very troubled with what it considered to be inadequate disclosures in Refco’s customer agreements regarding, among other things: (a) The treatment of customer assets; (b) whether Refco had the right to pledge, hypothecate, or otherwise use customer assets for its own purposes; (c) whether a Refco affiliate was acting as a “broker” or a dealer/counterparty in securities transactions; (d) whether clients knew which Refco affiliate they were dealing with and whether such affiliate was regulated or unregulated; and (e) the risks, bankruptcy and otherwise, of trading with an unregulated entity.
After Refco, full and complete disclosures on the issues outlined above should become standard in every customer agreement. In addition, it would be “best practices” for brokers and dealers to walk prospective customers through the important provisions of their customer agreements or, at a minimum, to require them to initial each page indicating that they understand the contents therein. Following these procedures may invite questions and be cumbersome, but doing so will help avoid tenuous bankruptcy situations and reduce the risk of personal liability for inadequate disclosures.
Lesson #3 — Active Participation Enhances Value in Mid-Size and Large Chapter 11 Cases
Refco is an excellent example of how individual creditors benefit from actively participating in today’s mid-size and large chapter 11 cases. In many of today’s cases, the “business” of the debtor is either dead (as in Refco) or is dying and must be sold within a reasonable time. The traditional reorganization cases are few and far between. In the new “liquidation era,” litigation initiated by the estate (increasing the size of the pie for all creditors) and litigation/deal making by an individual creditor are the principal avenues for increasing an individual creditor’s recoveries.
As a result, creditors must be very pro-active in protecting their interests in chapter 11 cases or they risk being left behind. In Refco, the creditors that enhanced their recoveries were those willing to (a) threaten and initiate litigation, (b) participate in official and unofficial creditor committees, (c) be very active in negotiating and structuring the “deal” that led to a confirmed plan.
It is much easier to lock in a favorable recovery through helping structure a plan than to challenge that plan as unfair in the bankruptcy court once the deal has already been cut. In addition, the additional recoveries obtained through active participation in a case from its inception often will dwarf the fees and costs expended in doing so.
Lesson #4 — Parent and Affiliate Guarantees May Have Significant Value
The final lesson from the Refco case is the value of parent and affiliate guarantees. Refco, like most large chapter 11 cases, involved numerous affiliated entities. Because the Refco estates were not all substantively consolidated, creditors with claims against (i) a principal debtor, and (ii) a parent or other affiliate debtor-guarantor, were able to assert two independent claims against Refco’s estates. The ability to assert two independent claims is expected to lead to significantly higher recoveries for such creditors as compared to similarly situated creditors who did not obtain a parent or affiliate guarantee.
Drawing on this lesson from Refco, when a company enters into a significant contract with a counterparty, it should always consider whether obtaining a guarantee from a parent or affiliate of the counterparty is possible. In many cases, the counterparty will agree to provide such a guarantee, especially if the contract is a significant one with an important customer.
It is very short-sighted for a creditor to think that a guarantee from an insolvent parent or affiliate would be worthless. Even if the parent or affiliate returns only a five percent distribution to its unsecured creditors in a bankruptcy, that is five percent more than the creditor will receive in the absence of a guarantee. A creditor should never underestimate the value of having an additional “pocket” that it can look to in order to enhance its recovery.
Michael P. Richman Partner Profile
Position and Professional Background
Michael P. Richman is a partner resident in Foley’s New York office and is the chair of its national Business Reorganizations Practice. Michael joined Foley in August 2006 after spending 17 years as a partner and associate with the Mayer, Brown, Rowe & Maw LLP bankruptcy practice out of New York.
Michael earned his J.D. in 1979 from Columbia University Law School, where he was a Harlan Fiske Stone Scholar and was awarded the David M. Berger Memorial Award in honor of Prof. Wolfgang Friedman (International Law). He also was the managing editor of the Columbia Journal of Transnational Law. He graduated from Vassar College in 1975, where he was awarded general honors and departmental honors in political science. Michael spent a year of his undergraduate study abroad attending the London School of Economics and Political Science.
Significant Experience and Representative Cases
Michael’s practice broadly covers all aspects of the bankruptcy and restructuring process. Specifically, Michael has significant experience in complex restructurings as counsel to unsecured creditor committees, debtors, secured lenders, bank groups, and large unsecured creditors in every region of the country.
Currently, Michael is serving as lead counsel to the Official Committee of Unsecured Creditors in the Centrix Financial (Centrix) chapter 11 case pending in Denver, Colorado. Centrix was a subprime lender in the auto industry with over $100 million in liabilities. The committee’s active role in the Centrix case helped lead to a successful sale of Centrix’s assets. Michael also is currently serving as co-lead counsel to the Official Committee of Unsecured Creditors in the NewComm Wireless Services, Inc. chapter 11 case pending in San Juan, Puerto Rico. The committee’s efforts in the NewComm case also helped lead to a successful sale of NewComm’s assets that will provide a 100 percent recovery, plus interest, to unsecured creditors.
Michael also currently serves as lead counsel to Access.1, the nation’s largest minority-owned radio and television broadcasting company, in out of court restructuring negotiations, and is special counsel to Medifacts International, Inc., a worldwide provider of clinical trial services to pharmaceutical, biotechnology, and medical device companies that are developing therapeutic drugs and products, in its chapter 11 case pending in Wilmington, Delaware. Michael also acts as national bankruptcy counsel to Ernst & Young LLP.
Prior to joining Foley, Michael served as national bankruptcy counsel to the Center for Claims Resolution in chapter 11 cases of asbestos producers and suppliers. Michael also recently served, among other roles, as counsel to Goldin Capital in the successful acquisition of a business in a contested Section 363 auction; counsel to the State of Mississippi in a $5 billion tax claim against MCI/Worldcom; counsel to Textron Financial Corporation as secured creditor in the chapter 11 cases of Leisure Industries; co-counsel to Credit Suisse First Boston in the OSI chapter 11 cases; counsel to agent lenders (including Bank of Nova Scotia and Textron Financial Corporation) in significant out-of-court financial workouts and restructurings; counsel to Bank of Montreal in adversary proceedings to determine status as secured or unsecured of over $1 billion of debt in Loewen chapter 11 cases; counsel to Umbro Worldwide in dispute with debtor licensee and co-licensee; and counsel to GE Capital Corporation in Loews Cineplex chapter 11 cases.
In addition, Michael has litigated numerous contested matters both inside and outside of bankruptcy court, including confirmation hearings, real estate bankruptcy disputes, avoidance actions, loan enforcement disputes and mortgage foreclosure litigation. Michael’s reported decisions include In re Snyders Drug Stores, Inc., 307 B.R. 889 (Bankr. N.D. Ohio 2004); In re Handy Andy Home Improvement Centers, Inc., 144 F.3d 1125 (7th Cir. 1998); In re Regency Holdings, Inc., 216 B.R. 371 (Bankr. S.D.N.Y. 1998); and In re Spirit Holding Co., 166 B.R. 367 (Bankr. E.D. Mo. 1993).
Leadership Positions and Professional Activities
Michael is very active in the American Bankruptcy Institute (ABI). Michael is a director and the immediate past chairman of the board for ABI as well as a former president and former member of ABI’s management and executive committees. He is a contributing editor to the American Bankruptcy Institute Journal (ABI Journal) and regularly writes for the ABI Journal, including the following recent articles:
- “The Importance of Full Disclosure in Seeking Success Fees under § 328(a): How Engaging is your Engagement Letter” (April 2007) (co-authored with Partner Jill L. Murch)
- “Communicating with Unrepresented Parties: Ethical Issues for the Estate Professional” (June 2007) (co-authored with Senior Counsel Geoffrey S. Goodman)
Michael also writes a periodic opinion column for the Daily Bankruptcy Review and his article on “Business Reorganizations After One Year of BAPCPA,” recently appeared in the March – April 2007 edition of Commercial Lending Review.
Michael’s accomplishments have been noted by peers and adversaries. He was named a New York “Super Lawyer” in a survey of his peers and honoring the top five percent of New York area lawyers in both 2006 and 2007, conducted by Law & Politics Media, Inc. He also is profiled annually in Who’s Who in America, Who’s Who in American Law, Who’s Who in Finance and Business, and Who’s Who in America: Finance and Industry, and was named one of 12 “Outstanding Restructuring Lawyers – 2004” by Turnarounds & Workouts.
In addition to his active ABI membership, Michael is a member of the American Bar Association (Committee on Business Bankruptcy), New York State Bar Association (Committee on Federal Courts; Subcommittee on Creditors’ Rights), Association of the Bar of the City of New York, and the New York and District of Columbia Bars.
Michael also is a frequent panelist and lecturer on a wide variety of bankruptcy and restructuring issues. His recent speaking engagements include the following:
- Panelist, Avoiding Real Estate Screwups in Southeast Transactions, 73rd Annual Meeting of the Arizona Bar Association (June 2007)
- Faculty, ABI Bankruptcy Litigation Skills Symposium, Tulane Law School (May 2007)
- Speaker, “Resolved: Loan-to-Own DIP Lenders Should Not be Allowed to Credit Bid,” 11th Annual Great Debates, at the 25th Annual Meeting of the American Bankruptcy Institute (April 2007)
- Panelist, Directors’ Duties in the Zone of Insolvency, Foley & Lardner Sixth Annual National Directors Institute (March 2007)
- Panelist, Advocacy Tips from the Best in the Business, ABI Rocky Mountain Bankruptcy Conference (January 2007)
- Speaker and Moderator, Hot Topics for Creditors’ Committees and Bankruptcy Litigation Tips from the Experts, Law Education Institute (January 2007)
Personal
Michael’s notoriety in the bankruptcy and restructuring communities does not end with his stellar professional reputation. Michael is an avid musician and is well-known as the founding member of the ABI house band, the Indubitable Equivalents (www.abiband.com). The Indubitable Equivalents, with Michael on the vocals and on keyboard, can often be heard rocking the house at various ABI and other bankruptcy events across the country. This year the band has performed at the House of Blues in Cleveland, Ohio, the Grand Traverse Resort in Traverse City, Michigan, and they are scheduled to play at conferences on Kiawah Island, the Maryland shore (Cambridge), Palm Springs, and in Orlando, Florida, at the annual meeting of the National Conference of Bankruptcy Judges. Michael just celebrated his 30th wedding anniversary with his wife Liz. Their son Joseph (18) is a sophomore at Georgetown University in Washington, D.C. and son Peter (17) is a senior at the Horace Mann School in Riverdale, New York.