• Homebuilder Case
Representation of Chapter 7 Debtor
The current collapse in real estate values has propelled
many real estate developments into insolvency, with
consequences to all participants. By way of example, in
this Chapter 7 case we were confronted by a real estate
developer with $150 million in personal guaranties on 17
developments. The objective of this bankruptcy proceeding,
as well as those to come, will be to put behind
developers' debts impossible to pay so that they will be
enabled to go forward with new projects.
• In re Galahad Foods, Inc.
Representation of Creditor Roundtable Franchise Corp.
Galahad was an operator of numerous Roundtable Pizza
franchise restaurants in the California Central Valley.
MLG represented Roundtable Franchise Corp. in successfully
opposing the Debtor's Chapter 11 plan, converting the case
to Chapter 7, negotiating an interim operating agreement
with the Chapter 7 trustee that allowed the restaurants to
be operated consistent with the standards of the franchise
agreement, and finally purchasing those restaurants as
going concerns from the Chapter 7 trustee. The
uninterrupted operation of all locations was essential to
the process, as was addressing the legal issues such as
insurance, labor, lease assumptions and licensing.
Negotiating favorable terms of assumed leases was key to
the economic success of the acquisition.
• In re Sugar Bowl Ski Corporation
Representation of Chapter 11 Debtor
Sugar Bowl operates a ski resort near Lake Tahoe,
California. The firm's lawyers represented Sugar Bowl in a
pre-packaged Chapter 11 plan of reorganization designed to
facilitate a recapitalization to allow for expansion and
improvements to the resort. MLG lawyers worked
cooperatively with Sugar Bowl's investors and equity
holders in negotiating the terms and structure of the
recapitalization, which included complex corporate and
real property development issues, in addition to delicate
interpersonal issues associated with reorganizing a
closely held corporation. MLG lawyers filed Sugar Bowl's
Chapter 11 two weeks before the Christmas holidays,
traditionally the busiest time of the ski season, and
successfully confirmed Sugar Bowl's Chapter 11 plan 60
days later. During the entire process Sugar Bowl operated
on a "business-as-usual" basis with all
creditors receiving payment in full.
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• In re At Home Corp. dba Excite@Home
Representation of Official Committee of Unsecured Creditors followed by
representation of post-confirmation entity
At Home Corp. (ATHM) supplied high-speed internet access
services to over four million customers of large and
mid-size cable companies, including AT&T Broadband,
Cox Communications, and Comcast Corp. At Home, through its
Excite web-portal, was also a leading provider of internet
content and advertising services. At one point, the At
Home/ Excite merger was valued at over $7.2 billion and
heralded as the largest internet merger in history. MLG
represented the Official Committee of Unsecured Creditors
in connection with all matters in the Debtor's Chapter 11
case, including opposing the Debtor's proposed sale of its
access business to AT&T Corp., the rejection of
unprofitable contracts with its cable company customers,
the resolution of hundreds of millions of dollars in lease
claims and the liquidation of the Debtor's media assets.
MLG was instrumental in realizing the remaining going
concern value of At Home through negotiation of new
service agreements which generated more than $356 million
for the estate. MLG was key to resolving complex disputes
with lienholders, equipment lessors, and bondholders that
ultimately led to confirmation of the Chapter 11 plan less
than 12 months after the Debtor filed its petition.
Post-confirmation, MLG represents Hank M. Spacone, the
Trustee of the liquidating trust established for the
benefit of unsecured trade creditors. In that capacity,
MLG resolved over 4,000 claims, supervised the prosecution
of avoidance actions and other litigation claims resulting
in a dividend to similarly-situated unsecured creditors
that was over 200% greater than that estimated during
confirmation. To complete the analysis of approximately
4,000 filed and scheduled claims on a timetable, MLG
formed a team that included CPA's experienced in claims
reconciliation and then used the firm's lawyers to
supervise the CPA's and to handle any claims that could
not be resolved through accounting reconciliation. Team
members were held accountable both for reporting on how
their tasks furthered project goals and for completing
their tasks on the timetable. The firm utilized both its
own litigators and outside litigation counsel to perform
due diligence on thousands of At Home files in search of
potentially valuable litigation rights, and prosecuted or
supervised litigation counsel in the prosecution of over a
dozen pieces of litigation that returned millions of
dollars to creditors. MLG also supervised intellectual
property litigation counsel in a review of At Home's IP
portfolio, developed a structure for the sharing of
information between separate outside IP litigation firms
to limit potential ethics and conflicts issues, and
managed litigation to clarify rights in IP litigation
pursuant to the confirmed plan. The firm supervised the
successful prosecution of preference actions that were
pursued on a contingent fee basis, also on a timetable,
recovering millions of dollars to the estate.
• In re NorthPoint Communications Group, Inc.
Representation of Creditor SBC Communications, Inc. NorthPoint (NPNT) was one of
the largest providers of DSL services in the United States
MLG represented affiliates and subsidiaries of SBC
Communications, Inc. in contested matters concerning SBC's
rights under its interconnection agreements and the
treatment of these rights under Section 365 of the
Bankruptcy Code, the sale of the Debtor's assets to
AT&T Corp., and the assignment of the interconnection
agreements to AT&T. As a result, SBC received
substantial payment on its claim in a case in which
distributions to creditors were insignificant. Resolving
these issues required specialized knowledge of the
Telecommunications Act as it applies to bankruptcy issues.
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• In re Access Beyond Technologies, Inc. fka Hayes Corporation
Representation of Conexant Systems, Inc.
MLG has extensive experience in addressing intellectual
property issues in the bankruptcy context. Examples
include supervising the At Home portfolio of intellectual
property, including the sale of intellectual property
assets, due diligence and litigation. MLG represented
Conexant Systems, Inc., a leading manufacturer of modem
chips, in successfully resolving a fraudulent conveyance
action brought in the Delaware Bankruptcy Court by the
Chapter 7 trustee of Hayes Microcomputers, the patent
inventor, owner and licensor in Hayes' second bankruptcy.
The Chapter 7 trustee attacked as a fraudulent conveyance
a settlement agreement between the Debtor and Conexant
reached 30 days prior to Hayes' bankruptcy. The settlement
agreement resolved patent licensing and royalty disputes
that had lingered between the companies for 12 years,
having remained unresolved despite Hayes' previous
bankruptcy. MLG successfully resolved the matter without
disturbing the settlement.
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• In re Webvan Group, Inc.
Representation of Official Committee of Unsecured Creditors
Webvan (WBVN) was a national online grocer which had
developed a proprietary technology platform to handle all
aspects of the customer ordering, inventory management,
collection, and order fulfillment functions of its
business. MLG represented the Official Committee of
Unsecured Creditors in all matters related to the Chapter
11 case. Key to the success of the Webvan case was MLG's
role in negotiating an incentive-based management
compensation scheme dependent in part on management's
reduction of the "burn rate" that was otherwise
depleting the cash resources of the debtor, including
management's ability to control professionals' fees, and
reaching certain benchmarks with respect to sales of
assets and progress toward confirmation of a Chapter 11
plan. MLG played a significant role in the sale of the
Debtor's technology platform, resolving disputes with real
and personal property lessors, secured creditors, and WARN
Act claimants, and confirming the Chapter 11 plan.
Post-confirmation, MLG represented R. Todd Neilson, the
representative of the Reorganized Debtors' estates. In
that capacity, MLG is administering a portfolio of over
1,500 claims, assisting the estate representative with the
liquidation of certain assets, and the prosecution of
avoidance actions and other litigation claims.
• In re iSyndicate
Representation of Official Committee of Unsecured Creditors
iSyndicate was an internet content aggregator. MLG
represented the Official Committee of Unsecured Creditors
in connection with all matters in the Chapter 11 case,
including the sale of its media properties to Yellowbrix,
and confirmation of the Chapter 11 plan within 12 months
of the petition date. Post-confirmation, MLG represented
Hank M. Spacone, the plan administrator. In that capacity,
MLG resolved several hundred claims, including the
resolution of employee class action claims under the WARN
Act after successfully tendering such claims to the
Debtor's pre-petition insurance carriers. MLG also
prosecuted numerous avoidance actions, including obtaining
a fraudulent conveyance judgment in excess of $200,000
against the former CEO's current wife on account of a
sexual harassment settlement payment made by the Debtor 91
days prior to the petition.
• In re Fortel, Inc.
Representation of Creditor Divestcap Growth Capital
Fortel was an information technology company specializing
in computer and systems optimization, data correlation and
search technology, and it developed and marketed intranet
and e-business performance management solutions. MLG
represented Divestcap Growth Capital in connection with
its bankruptcy acquisition of substantially all of
Fortel's assets, including its patent-related licensing
portfolio.
• In re Chip Shot Golf Corporation
Representation of Official Committee of Unsecured Creditors
Chip Shot Golf was an online retailer of golf equipment.
MLG represented the Official Committee of Unsecured
Creditors in connection with all matters in the Chapter 11
case, including post-petition financing and negotiations
with its secured lender over the scope and validity of
security interests in intellectual property, leading to
the sale of Chip Shot as a going concern to a third party.
In addition, MLG represented the Committee in its
negotiations with the Debtor's landlord to buy back Chip
Shot's real property leases resulting in a cash payment of
over $4 million to the estate. Thereafter, MLG worked
cooperatively with the Debtor to confirm a liquidating
Chapter 11 plan.
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