Bankruptcy Law

We have represented numerous national and state banking institutions, as well as many local corporate entities in restructuring corporate debt. We represent both creditors and debtors in the state court system, the federal district courts and the U.S. Bankruptcy Courts. By example, here are some of the Firm’s recent successes in this practice area:

Recovery for Landlord in Debtor’s Attempt to Escape Obligations 

Partner Anthony J. D’Artiglio and other firm attorneys recently secured a favorable decision from the Bankruptcy Court in the Southern District of New York in the Fairway Group Holdings Corp. matter. Our client, Debtor’s property owner, filed a multi-million-dollar cure objection asserting that Debtor had failed to repair and maintain the property in accord with its lease obligations, and thus needed to make the necessary repairs or pay for the repairs as part of the lease assumption and assignment. Debtor sought to dismiss the cure objection, arguing that the new tenant was responsible for all pre-assignment defects as part of the lease’s ongoing repair and maintenance obligations and that, because property owner did not issue a default notice pre-petition pursuant to a lease provision, property owner could not claim that a “default” existed requiring cure pursuant to the Bankruptcy Code. The Court resoundingly rejected Debtor’s arguments, holding that (i) Debtor is responsible for all necessary pre-assignment repairs pursuant to the lease because the buyer took the property “free and clear” of any and all defaults by Debtor at the time of the assignment, and (ii) landlord was not required to formally notice a “default” under the lease to seek the cost of repairs from Debtor for any pre-assignment condition in need of repair particular where, as here, Debtor was on notice upon the filing of the cure objection.  As a result of this favorable ruling, our client can recover millions of dollars in repair costs.

Conversion to a Chapter 7 and Vacature of Extension of Automatic Stay

The Firm successfully compelled conversion of a meritless Chapter 11 to a Chapter 7 proceeding and convinced the Court to vacate an extension of the automatic stay to the principal’s of the Debtor company. Debtor filed a Chapter 11 petition in the District of New Jersey just before it and its principals were scheduled to face trial in the Western District of Missouri on multi-million dollar fraudulent scheme related to the sale of a business. The firm successfully convinced the Court to vacate an extension of the automatic stay to the principals of Debtor who sought to utilize the Bankruptcy to shield themselves from liability. Furthermore, we vigorously opposed confirmation of a meritless Plan of Reorganization, culminating in Debtor voluntarily converting its Chapter 11 reorganization to a Chapter 7 liquidation requiring the appointment of a Trustee to pursue our client’s and other creditors’ interests. As a result, the adversary complaint and related Bankruptcy matters were dismissed in New Jersey permitting the action to proceed to trial in Missouri.

Protection for Landlord from Tenant Bankruptcy  

Partner Anthony J. D’Artiglio assisted by other firm attorneys, secured an extremely favorable settlement on behalf of a property owner whose tenant filed for bankruptcy after failing to make any rent payments over a prolonged period. Following our filing of an application to compel lease rejection or for relief from the automatic stay, the tenant agreed to pay outstanding rent and additional rent, our client’s attorneys’ fees and costs, and to increase the security deposit as a condition of assumption of the lease, ensuring the property owner was not harmed by the tenant’s bankruptcy filing.

Relief for Landlord from Automatic Bankruptcy Stay 

Partner Anthony J. D’Artiglio  successfully secured relief from the automatic bankruptcy stay for a landlord whose tenant had sublet the property without authorization, failed to pay substantial rent, and additional rent due and owing. We successfully convinced the Court to order the tenant to make post-petition payments on an ongoing basis and to lift the automatic stay to permit the property owner to pursue the tenant for damages and eviction in State Court while the bankruptcy remained pending.