UPDATE: 10/26/2012, 10:00 a.m. EDT. Munger, Tolles & Olson partners Thomas Walper and Seth Goldman are advising Warren Buffett’s Berkshire Hathaway on its $1.5 billion acquisition of Residential Capital’s 47,000 loan portfolio. Buffett has been a longtime client of the firm, whose founding partner Charles Munger is a vice-chairman at Berkshire Hathaway.
A group led by mortgage servicer Ocwen Financial and advised by Mayer Brown has won an auction for the loan origination business of bankrupt mortgage lender Residential Capital with a $3 billion offer.
Mayer Brown banking and finance partners Jon Van Gorp and John Lawlor, and corporate and M&A partner William Kucera are leading a team from the firm advising Ocwen, which also received bankruptcy counsel on the deal from Magic Circle firm Clifford Chance. Former Arent Fox partner Paul Koches has served as general counsel of Ocwen since 2008.
A bankruptcy court hearing has been scheduled for November 19 for approval of the sale, which saw Ocwen beat out stalking horse bidder Nationstar Mortgage Holdings, a Lewisville, Texas-based servicer of residential mortgage loans.
New York-based Fortress Investment Group owns a majority stake in Nationstar, which was advised in bankruptcy proceedings by Sidley Austin corporate reorganization cochair Larry Nyhan and bankruptcy partner Jessica Boelter. Nationstar’s general counsel is Anthony Villani.
Minneapolis-based ResCap, the embattled mortgage unit of auto lender Ally Financial, filed for bankruptcy in May. The Am Law Daily reported at the time that lawyers from Morrison & Foerster, Curtis, Mallet-Prevost, Colt & Mosle, and New York’s Morrison & Cohen had landed key roles advising ResCap and its independent directors in the company’s Chapter 11 case.
A team of lawyers from Mayer Brown led by corporate and securities partner Elizabeth Raymond has been advising Ally as it seeks to pay back a $17.2 billion bailout it received from the federal government at the height of the financial crisis.
Ally, meanwhile, tapped Sullivan & Cromwell for counsel on the $4.1 billion sale this week of its Canadian loan business, as well as its $865 million sale of Mexican subsidiary ABA Seguros. Kirkland & Ellis bankruptcy partners Richard Cieri, Stephen Hessler, and Ray Schrock are serving as bankruptcy counsel to Ally in the ResCap matter.
A bankruptcy auction of ResCap’s loan portfolio has been scheduled for Thursday, according to The Deal. The company’s Chapter 11 case has provided a plethora of work for at least a dozen law firms.
Billing statements filed with the court in Manhattan this month show that Morrison & Foerster is seeking more than $15.2 million in fees and expenses for its work in the case as lead bankruptcy counsel to ResCap from May 14 through August 31.
Conflicts counsel at Curtis is seeking $499,642 in fees and expenses during that same time period, while Morrison & Cohen has billed $329,874 for its work representing ResCap’s directors.
Columbus-based Carpenter Lipps & Leland filed papers with the court on October 19 seeking nearly $1.3 million for its work as special litigation counsel to ResCap through August 31. Bradley Arant Boult Cummings, which is serving as special litigation and compliance counsel to the debtor, is seeking nearly $4.4 million for its work during that time frame.
Dorsey & Whitney, which is serving as special securitization and investigatory counsel to the debtor, is seeking $417,294 for its services through August 31, with Orrick, Herrington & Sutcliffe requesting another $734,035 for its work during that period as special securitization transactional and litigation counsel.
Also seeking fees for work done on behalf of ResCap through August 31 are special California litigation counsel Severson & Werson ($1.4 million), special counsel Locke Lord ($263,807), Troutman Sanders ($222,225), and Reed Smith ($67,306).
Former bankruptcy judge Arthur Gonzalez, who handled the Enron and Chrysler bankruptcies before retiring last year, was named in July as an examiner in the ResCap case. Court records show that he’s billed $86,138 for his work from July 3 through August 31.
Chadbourne & Parke, which is serving as counsel to Gonzalez, has billed more than $3.4 million for its services through the same time frame. Kramer Levin Naftalis & Frankel is serving as counsel to an official committee of unsecured creditors and has billed the bankrupt estate nearly $11 million for its efforts in the case through August 31.
Below are some of the latest notable corporate bankruptcy filings of note and their counsel of record. As usual, hourly billing rates for attorneys are in parentheses, when available.
Bakers Footwear Group
St. Louis-based shoe retailer Bakers Footwear Group filed for bankruptcy in its home city earlier this month, listing $41.9 million in assets against debts of $59.5 million. The company, which has 215 stores in 35 states, announced it would close as many as 25 of those stores, while selling the leases on roughly 50 more to the Montreal-based Aldo Group for $6.3 million.
Bryan Cave bankruptcy partner Brian Walsh and counsel David Unseth in St. Louis are taking the lead advising Bakers in the Chapter 11 case. Court records show that Bakers paid the firm $418,490 between October 1, 2011, and its October 2, 2012, bankruptcy filing.
Bryan Cave has agreed to waive another $335,068 in unpaid fees and expenses it is owed by the company, according to a declaration filed by Walsh. Excluded from that amount is a $400,000 retainer the firm was paid by the debtor on October 2.
Privately owned Aldo, which runs more than 1,600 shoe stores worldwide, is being advised by Hinshaw & Culbertson corporate partner David Asmus in Phoenix.
HMX Acquisition, owner of the Hickey Freeman and Hart Schaffner Marx tailored clothing brands, the latter of which made a suit worn by President Barack Obama at his 2009 inauguration, filed for bankruptcy in Manhattan on October 19. Both labels were launched in Chicago in 1887, according to The Associated Press, which notes that original parent company Hartmarx was sold out of bankruptcy in 2009.
The Am Law Daily previously reported on Skadden, Arps, Slate, Meagher & Flom‘s role advising Hartmarx on the sale of the suit maker’s assets to London-based Emerisque Brands and a North American unit of Indian clothing company SKNL. HMX, the new company created via that deal is now slated to sell its assets for an undisclosed sum to the New York-based Authentic Brands Group, according to Bloomberg.
DLA Piper restructuring cochair Richard Chesley, who joined the firm last year with a group of lawyers from Paul Hastings, and partner George South III are advising Authentic Brands on its bid to purchase HMX.
Mark Thomas ($975), cohead of Proskauer Rose‘s bankruptcy and restructuring group, is advising HMX along with partner Peter Young ($800). Court records show that the firm has received fee payments totaling $821,148. Proskauer partners are billing between $550 and $1,050 per hour, senior counsel between $450 and $950, and associates at ranges ranging from $205 to $750. Hourly rates for the firm’s lawyers will increase on November 1, when Proskauer’s new fiscal year begins, according to court filings.
According to a list of HMX’s 30-largest unsecured creditors, the debtor owes $416,022 to Katten Muchin Rosenman and $179,214 to Bryan Cave. Sherry Jetter serves as general counsel for HMX.
After the Chapter 11 filing of electric car battery maker A123 Systems last week, another company in the green energy sector followed suit, as Boston-based solar inverter manufacturer Satcon Technology began bankruptcy proceedings in Delaware on October 17.
Satcon lists $92.3 million in total assets against $121.9 million in debts in its bankruptcy filing. Reuters reports the company suffered from falling demand for its products following lowered European subsidies to the renewable energy sector.
Greenberg Traurig corporate partner Jonathan Bell and business reorganization partners Nancy Mitchell and Maria DiConza are advising Satcon in its Chapter 11 case. The firm has not yet filed billing statements with the bankruptcy court.
Fraser Milner Casgrain has been retained as Canadian counsel to the debtor. According to a list of Satcon’s 30-largest unsecured creditors, the company owes $242,427 to Wilmer Cutler Pickering Hale and Dorr.
South Franklin Circle
South Franklin Circle, a nonprofit continuing-care retirement community based in Chagrin Falls, Ohio, filed for bankruptcy on October 24 in nearby Cleveland. Bloomberg reports that South Franklin, which lists assets of $167.2 million against $166.3 million in debt, hopes to reduce its total secured debt by 40 percent as a result of the move.
McDonald Hopkins business restructuring services cochair Shawn Riley, who also serves as managing partner of the firm’s Cleveland office, is advising South Franklin along with partner Sean Malloy. (Click here for South Franklin’s most recent Form 990 filing with the IRS from 2010.)
The firm has received $466,975 from the debtor over the past year, as well as a replenishing retainer of $60,000 that has been increased, according to court records. McDonald Hopkins partners are billing between $315 and $690 per hour, of counsel between $330 and $650, and associates at rates ranging from $200 to $380.
James Vail ($302), assistant secretary for South Franklin and a partner at Schneider, Smeltz, Ranney & LaFond—which bills itself as Cleveland’s oldest law firm—is serving as special corporate counsel to the debtor, along with partner Kenneth Laino ($302). Court records show that the firm has been paid $50,000 for its services.
The New York Times reported this week on the struggle by some coffee purveyors when confronted with the ubiquity of Starbucks. One of those companies, TC Global, the Seattle-based parent of retailer and wholesaler Tully’s Coffee, filed for bankruptcy in its home city on October 10 and announced it would close at least nine of its 175 stores.
Gayle Bush, a name partner at Seattle’s Bush Strout & Kornfeld, is advising Tully’s in its Chapter 11 case along with partners James Day and Christine Tobin-Presser. Richard Birinyi and Lawrence Ream, partners with Seattle’s Schwabe, Williamson & Wyatt, has been selected to represent an official committee of unsecured creditors.
News reports state that some Tully’s stores that are being shuttered have been sold off to new owners. According to a list of Tully’s 20-largest unsecured creditors, the company owes $92,855 to Bryan Cave and $28,442 to Seattle’s Carney Badley Spellman. Securities filings list Andrew Mun as the general counsel of Tully’s, but Washington State Bar Association records indicate he is no longer with the company.
The coffee industry has experienced something of a shakeup in recent years. This summer another Starbucks rival, Peet’s Coffee & Tea, turned to Cooley for counsel on its $974 million sale to German conglomerate Joh. A. Benckiser. Two years ago Ropes & Gray advised Green Mountain Coffee Roasters, which has a licensing agreement with Tully’s, for a series of acquisitions, according to our previous reports.
For the third—and what appears to be the final—time since 2008, Baltimore-based advertising and marketing firm Vertis has filed for bankruptcy as it seeks a $258.5 million sale to stalking horse bidder Quad/Graphics.
John Rapisardi, cochair of the financial restructuring practice at Cadwalader, Wickersham & Taft, is leading a team from the firm representing Vertis that includes litigation partner Israel Dahan, and bankruptcy special counsel Zachary Smith. Jason Madron, counsel at Delaware’s Richards, Layton & Finger, is serving as local counsel to the debtor. Neither firm has yet filed billing statements with the bankruptcy court.
Jay Indyke, chair of the bankruptcy and restructuring practice at Cooley, is leading a team representing an official committee of unsecured creditors that includes partners Jeffrey Cohen and Richard Kanowitz. Local counsel to the committee is being provided by Scott Cousins, a name partner at Delaware’s Cousins Chipman & Brown.
David Glogoff serves as chief legal officer and secretary for Vertis, which last filed for bankruptcy in November 2010 with the aide of its former lawyers from Skadden, according to our previous reports. The company shed $700 million in debt and emerged from Chapter 11 a month later.
Quad/Graphics, a printing company based in Sussex, Wisconsin, is being advised by a team of lawyers in its effort to acquire Vertis led by Arnold & Porter bankruptcy partner Michael Canning and M. Blake Cleary, a partner at Delaware’s Young Conaway Stargatt & Taylor.