Big creditor banks would love to forget about last month’s ruling in the Tousa Chapter 11. But bondholders in other bankruptcies are making sure they don’t. (Hat tip: Chicago Tribune)

As we told you in October, the federal bankruptcy court judge overseeing Tousa’s Chapter 11 ruled in favor of a group of unsecured creditors who claimed that several major financial institutions, including Bank of America and Citigroup, engaged in a fraudulent conveyance when they lent the homebuilder Tousa $500 million before it filed for bankruptcy. (The decision followed a trial at which the bondholders were represented by Robbins, Russell, Englert, Orseck, Untereiner & Sauber.)

Now, according to The Chicago Tribune, a group of bondholders in the Tribune bankruptcy are waving the Tousa decision in the face of the banks that financed Sam Zell’s $8.2 billion leveraged buyout of the media company. The Tribune bondholders haven’t yet filed suit. But a motion filed by Kasowitz Benson Torres & Friedman, which represents the bondholders’ trustee, suggests that litigation may be coming. “As recently determined in the Tousa bankruptcy cases on similar facts, the LBO lenders’ claims are subject to dispute and likely avoidance as fraudulent conveyances,” the Kasowitz attorneys wrote in the motion, which seeks to stop Tribune affiliates from making payments to lenders.

We called Kasowitz’s David Rosner to see if Tousa has the banks running scared. He told us the decision has indeed forced financial institutions to evaluate their liability on the “no money down” LBOs they financed in 2007. Rosner’s firm, meanwhile, is also trying to capitalize on the Tousa ruling in the Lyondell Chapter 11, in which Kasowitz is involved in litigation on behalf of bondholders against bank creditors. Rosner noted that both the Lyondell and Tribune LBOs closed on Dec. 20, 2007. “A dark day for LBOs,” said Rosner.

In the Tribune bankruptcy, Daniel Golden of Akin Gump Strauss Hauer & Feld represents Centerbridge Partners, the largest bondholder. If the bondholders initiate litigation against the banks, Kasowitz may take the lead since Akin Gump is unlikely to be adverse to big banks. But Golden should be helpful in the case: He’s the lawyer who brought in Russell Robbins to sue the banks in the Tousa Chapter 11, acting in his role as counsel to the official committee of unsecured creditors. (When we spoke to Golden, he told us that his preference would be that conflict counsel for the official unsecured creditors committee in the Tribune bankruptcy — Zuckerman Spaeder — take the lead in any litigation against the banks.)

Sidley Austin represents the Tribune in its Chapter 11. Lawyers for the big bank creditors include Sharon Katz of Davis Polk & Wardwell for JPMorgan; David Brown of Paul, Weiss, Rifkind, Wharton & Garrison for Citigroup; Madlyn Primoff of Kaye Scholer for Merrill Lynch; and Glen Silverstein of Leader & Berkon for Morgan Stanley. Counsel for the banks and the Tribune did not comment for the Chicago Tribune‘s story.

This article first appeared on The Am Law Litigation Daily blog on