Since the inception of the distressed asset secondary market, Chapman attorneys have advised buyers, sellers, and broker-dealers in the purchase and sale of distressed claims and loans.
Chapman helps clients invest in distressed assets and acquire companies both in and out of court and through the purchase of distressed loans. Deploying depth of experience and market knowledge representing clients originating a wide variety of loans puts Chapman in a unique position of understanding the intricacies of a credit agreement and collateral package.
Debt and Claims Trading
Chapman’s debt‑trading team possesses extensive experience in representing investors in the purchase and sale of par and distressed loans, portfolios of loans, and other financial instruments, including various forms of claims. We advise on strategic acquisitions of such loans and claims in connection with attempting to execute a specific outcome in a bankruptcy proceeding. We also provide real-time analyses to investors interested in making arbitrage investments in distressed situations.
Acquisitions Through Bankruptcy Section 363 Sales/Credit Bidding
We advise clients in connection with the purchase of companies through acquisitions of assets of distressed businesses in bankruptcy proceedings through section 363 sales or plans of reorganization, and assist clients in making “stalking horse” or competing bids for all or a portion of the assets of such companies.
Acquisitions Through UCC Article 9 Sales
We represent clients seeking to acquire portfolio companies by acquiring a controlling position in the fulcrum security to exercise secured creditor remedies under the Uniform Commercial Code.
DIP, Rescue, and Exit Financing
We represent investors looking to make rescue, debtor-in-possession (DIP), and exit loans to troubled companies. We also represent lenders with existing prepetition relationships or third-party lenders interested in making DIP loans available to assist the funding of a chapter 11 reorganization.
- Counsel to the purchaser of the regional trademark and licensing rights in the section 363 sale of Toys R Us.
- Counsel to the purchaser of drug patent rights in the section 363 sale of pharmaceutical drugs by Insys Theraputics.
- Counsel to a hedge fund as the bridge lender and subsequently as a debtor-in-possession lender to Cambrian Holding Company, Inc. and its related entities and as the purchaser in a section 363 sale of the Cambrian assets.
- Counsel to continuing care retirement community (CCRC) operator Covenant Living as the successful bidder in three section 363 sales for the assets of CCRCs in Indiana, New Hampshire, Oklahoma, and Texas.
- Counsel to a private fund in the acquisition by UCC-9 foreclosure sale of a company, which provided publishing and information services to the financial services industry, and in the subsequent sale of the company to an industry purchaser.
- Counsel to Centaur Holdings, LLC in connection with its acquisition in a section 363 sale of substantially all of the assets (including real estate holdings) of Indianapolis Downs, LLC, the owner and operator of an Indiana casino and horse racing track.
- Counsel to a Texas private equity firm in connection with a bid to purchase Reichhold, a global resin supplier, in a section 363 auction.
- Counsel to a private equity sponsor in the purchase of distressed bank loans and the related equity foreclosure action to become the owner of a Pennsylvania-based logistics company.
- Counsel to a lender in connection with a strict foreclosure of a pharma trials facilitator company.
- Counsel to a lender in connection with a strict foreclosure of a pharma advertising company.
Distressed Investing Updates
- ArticleUS-Israel Legal Review 2022
Michael Friedman, Chapman's Israel practice head and practice leader for the firm's Special Situations and Restructuring Group, and associate Helena Honig, authored an article for the US-Israel Legal Review 2022, published by Israel Desks.