O’Melveny Worldwide

Bankruptcy Litigation

Operating at the intersection of finance and advocacy, we guide clients through complex restructurings while resolving disputes and championing their interests.

Operating at the intersection of finance and advocacy, we guide clients through complex restructurings while resolving disputes and championing their interests.

Our bankruptcy litigators combine restructuring and finance experience with elite dispute-resolution skills to ensure that clients have the best of both worlds. In the biggest, most contentious cases on record, our litigators have repeatedly prevailed in intercreditor disputes, contentious plan confirmations, committee investigations, debtor-in-possession financings, restructuring support agreements, contested asset sales, fraudulent transfer cases, motions to lift the automatic stay, and novel statutory interpretation issues in courts across the country, including the United States Supreme Court.

We advocate for clients by devising strategies, negotiating with creditors, litigating adversary proceedings, and shaping narratives—an approach that helps maximize recoveries and build favorable law. Having effective bankruptcy litigators as part of a restructuring team can drive results in court by helping facilitate a consensual resolution. No relationship exemplifies the value of bankruptcy litigation experience more than our work for the Commonwealth of Puerto Rico, a representation that has involved defending more than 25 adversary proceedings and contested matters touching on unprecedented issues cutting across dozens of sections of the bankruptcy code, the United States Constitution, and local law. We have also undertaken significant representations in litigious chapter 11 cases for Brazos Electrical Power Cooperative, The Boy Scouts of America, Energy Future Holdings, Sears, Stone Energy Corporation, Tops Markets, General Motors, LyondellBasell, and others.

Our Bankruptcy Litigation services encompass:

  • Bankruptcy litigation strategy development, including identifying potential disputes and recommending a course of action consistent with the client’s business goals
  • Representing debtors, including preparing bankruptcy petitions and plans, negotiating with creditors, and litigating disputes related to the bankruptcy
  • Representing senior creditors, including filing claims, negotiating with debtors, and litigating disputes related to the bankruptcy
  • Litigating adversary proceedings in bankruptcy court
  • Bankruptcy appeals
  • Investigations, trials, and other contested proceedings
American Airlines Pension Plan Trust

Defending client in an unprecedented fraudulent transfer litigation by the estate of Allied Systems Holdings. The estate seeks to claw back from the trust and other investors in a Yucaipa private equity fund, hundreds of millions of distributions from the fund as fraudulent transfers, under the theory that since the Yucaipa fund was rendered insolvent by a multimillion dollar judgment rendered against the fund, its disbursements to investors leading up to the judgment were fraudulent.

Apollo Global Management

Represented a group of secured lenders in the first lien debt of Texas Competitive Electric Holdings LLC (TCEH), a subsidiary of Energy Future Holdings (EFH) cases in a billion dollar intercreditor dispute. We won dismissal with prejudice of a lawsuit by another group of secured lenders. The decision was affirmed by both the District Court of Delaware and the Third Circuit after oral argument.

Brazos Electric Power Cooperative

O’Melveny served as lead counsel for Brazos Electric Power Cooperative, securing confirmation of its $2.1 billion chapter 11 plan following catastrophic Winter Storm Uri in Texas. O’Melveny helped Brazos secure $350 million in DIP financing, successfully contested ERCOT's $2.1 billion proof of claim, and achieved numerous settlements through mediation.  The positive outcome has far-reaching implications on the interplay between state laws and their authority over electric cooperatives.

Burnham Sterling and Babcock & Brown Securities

Represented clients in litigation against Avianca Holdings S.A. to successfully secure payment of over US$4 million in post-petition lease obligations for aircraft lease initiator fees owed to our clients. The bankruptcy court’s published opinion has a substantial impact on aircraft procurement and treatment of post-petition lease obligations in bankruptcy.

Chubb Group

Secured significant victories for insurers in the settlement agreement of the Boy Scouts of America's chapter 11 filing – one of the country's most prominent and controversial bankruptcy cases.

Puerto Rico Fiscal Agency and Financial Advisory Authority

As counsel for the Puerto Rico Fiscal Agency and Financial Advisory Authority, we successfully opposed a creditor’s suit before the US Supreme Court alleging that President Obama violated the Constitution’s Appointments Clause in making appointments to Puerto Rico’s financial oversight board. The case threatened to nullify much of the work the board had done to help restructure debt and bring about other reforms.

Former Directors of Fusion

Represented clients in chapter 11 case in a claim asserted by a liquidating trustee created by the chapter 11 plan. After a successful mediation before a complaint was even filed, the case was resolved for no payment by the directors, and the compromise was completely funded by insurers.

Former Director of Sears

Represented client in a breach of fiduciary and fraudulent transfer litigation in the Southern District of New York Bankruptcy Court brought by Sears’ estate. We helped guide the former director through a complex mediation and helped secure a settlement of the case.

Franklin Advisors

Represented client as DIP lender to Appvion Paper in its chapter 11 case. When Appvion’s business declined while in chapter 11, we helped Franklin step in as a stalking horse bidder to acquire Appvion’s assets and stave off a liquidation. Two minority DIP lenders sued Franklin, arguing that the purchase violated their rights as DIP lenders. After successfully keeping the lawsuit in bankruptcy court over their attempts to litigate the case in state court, we negotiated favorable settlements with both lenders.

Global Investment Bank and Former Directors of Tops Markets

Representing client and former directors of the New York-based supermarket chain, Tops, in a significant fraudulent transfer litigation against them by Tops’ estate. The complaint alleges that dividends totaling US$376 million that Tops issued between 2009 and 2013 were fraudulent transfers and illegal dividends.

Hyundai Steel

Helped Hyundai Steel resolve a yearslong dispute with a debtor that defaulted on notes held by Hyundai. After the debtor was forced to sell collateral in a bankruptcy sale, the proceeds were used to satisfy a substantial portion of the debt owed to Hyundai—and the parties agreed to drop all claims against one another.

Representative Clients
Brazos Electric Cooperative
Commonwealth of Puerto Rico
Fannie Mae
Johnson & Johnson
JPMorgan Chase
Morgan Stanley
Puerto Rico Fiscal Agency and Financial Advisory Authority

Bankruptcy Group of the Year

–Law360 (2022)

John Rapisardi: Dealmaker of the Year 

–The American Lawyer (2022)

John Rapisardi: MVP of the Year 

–Law360 (2022)

Lou Strubeck: Best Lawyers in Dallas

D Magazine (2022)

Lou Strubeck: Outstanding Restructuring Lawyers

Turnaround & Workouts (2021)