Selendy & Gay has deep experience representing private equity funds, hedge funds, trustees, and other clients in high-stakes insolvency-related proceedings. We combine our litigation and trial expertise with our knowledge of bankruptcy and insolvency law to develop effective solutions and strengthen our clients’ positions in forums including federal bankruptcy court and the Delaware Court of Chancery.
We lack the conflicts that disable larger firms and we have a track record of litigating and winning against the major money center banks—and so are often brought into adversary proceedings as conflicts counsel and courtroom specialists.
Our partners’ representative engagements include:
- McKinsey & Company, a worldwide management consulting firm, against claims by Jay Alix, founder of consulting firm AlixPartners, and Mar-Bow Partners, a company founded by Jay Alix, challenging McKinsey’s Chapter 11 disclosures under Rule 2014 in bankruptcy courts in the Southern District of New York, the Southern District of Texas, the Eastern District of Virginia, and the District of Delaware.
- Athilon Capital Corp., a financial consulting firm, in a trial victory in the Delaware Court of Chancery in front of Vice Chancellor Travis Laster, involving claims of breach of fiduciary duty, breach of contract, and fraudulent transfer claims which sought hundreds of millions of dollars in damages, as well as a court order which would have forced our client, the defendant, to liquidate its assets and close the business entirely. The press described this trial victory as a “resounding win” in a “literal bet-the-company case” that set precedent concerning the test for insolvency under Delaware law and that was affirmed by the Delaware Supreme Court.
- Fairfield Sentry Limited (in liquidation), a fund of a New York City-based investment firm, in seeking to recover funds against more than 100 defendants.
- The Joint Official Liquidators of Herald Fund SPC, a Cayman-Islands based Madoff feeder fund, in clawback litigation brought by the Madoff Trustee against the Fund. Successfully negotiated a groundbreaking settlement with the Madoff Trustee resolving the clawback claims and obtaining an allowed $1.6 billion SIPA claim.
- ResCap Liquidating Trust, a trust established to liquidate and distribute assets of debtors in the ResCap bankruptcy, in suits against dozens of loan originators for indemnity and breaches of contract arising from the sale of defective mortgage loans. Achieved settlements of $590 million in proceedings in multiple state and federal jurisdictions, including in the Southern District of New York Bankruptcy Court.
- An ad hoc committee of secured lenders in the Capmark Financial Group bankruptcy. Successfully obtained approval of a $975 million settlement after a month-long trial in the District of Delaware, allowing Capmark to pay back a $1.5 billion loan at a 9% discount in return for the release of avoidance claims by Capmark’s junior creditors, which challenged the payment as a fraudulent transfer.
- Samsung, IBM, Infineon Technologies, and Elpida Memory, four of the world’s largest semiconductor companies, in a landmark Chapter 15 insolvency matter to establish the right of U.S. patent licensees to the protections of Section 365(n) of the Bankruptcy Code despite contrary German law governing the foreign main proceeding. Bankruptcy Court decided in our clients’ favor, and was later affirmed by the 4th Circuit.
- Washington Mutual, a savings bank holding company, in a lawsuit against JPMorgan in Delaware federal bankruptcy court—which arose out of one of the largest bankruptcies in history and resulted in a settlement of over $6 billion.
- Yamana Gold, a Toronto-based precious metals mining company, in bailment and reclamation claims arising from the Chapter 11 insolvency of Republic Metals Corporation in the Southern District of New York.