Banking and Capital Markets Litigation
A 2016 Law360 “Banking Group of the Year,” Kasowitz represents institutions, corporations and individual clients in a broad range of banking and capital markets matters. Our banking and capital markets litigators have deep experience with issues arising from all manner of syndicated and bilateral credit transactions, equity transactions, and bank financing arrangements. Our clients cover the full spectrum of primary and secondary capital markets participants, including hedge funds, private equity firms and portfolio companies, corporate issuers, opportunistic institutional investors, and foreign and domestic commercial loan parties.
We possess sophisticated knowledge about rights and obligations arising under indentures, credit agreements, intercreditor agreements, trust documents and commercial loan contracts, and we regularly prosecute and defend a wide range of banking and capital markets litigation, including: disputed leveraged buyouts; debt exchanges and other capital structure transactions; distressed debt and activist investment strategies; lender liability; fraud; breach of fiduciary duty; fraudulent conveyance; major commercial foreclosure matters; actions concerning complex structured finance securitizations and CDOs; and disputes over credit default swaps and other derivatives.
While our litigators have the proven experience and sophistication necessary to litigate these complex banking and capital markets matters, our Firm’s unique structure allows us to be adverse to the world’s largest money-center banks. We routinely pursue and defend claims against J.P. Morgan, Deutsche Bank AG, Barclays, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, Merrill Lynch and UBS AG, among others.
Our aggressive litigation approach helps our clients protect their rights, preserve their investments, and achieve their business objectives. At the same time, we recognize that litigation is often strategic and we are always aware of the economic drivers underlying civil disputes and the costs and benefits of litigation-related strategies.
Some of our representative banking and capital markets engagements include:
- Global A&T Electronics (“GATE”), a Singapore-based semiconductor company, securing complete dismissal of claims by first lien noteholders seeking to unwind GATE’s $502 million debt exchange based on alleged breaches of the governing indenture and intercreditor agreements.
- TPG, one of the world’s largest private equity firms, and senior TPG partners, in bankruptcy proceedings and multiple state and federal court actions concerning TPG portfolio company Caesars Entertainment. Claims at issue include alleged fraudulent transfers, breaches of governing indentures, and breaches of fiduciary duty in connection with controversial and complex transactions undertaken prior to the bankruptcy filing of Caesars' operating subsidiary.
- Apollo Management’s Hexion Specialty Chemicals in its action against Credit Suisse and Deutsche Bank seeking specific performance of the banks’ $15 billion commitment to finance Hexion’s acquisition of Huntsman Chemical. After expedited discovery, Kasowitz successfully negotiated a settlement with Huntsman, bringing an end to one of the largest battles over a leveraged buyout. Major media outlets, including The Wall Street Journal, lauded the settlement negotiated by Kasowitz as a "sweet deal" for Apollo and Hexion.
- The Adelphia Recovery Trust, which was created pursuant to the plan of reorganization of Adelphia Communications, Inc., in obtaining a $175 million settlement in an action against numerous banks and financial institutions alleging that they aided and abetted the Rigas family in looting the Adelphia cable companies through their creation of unprecedented lending structures that assisted the Rigases' misconduct. Kasowitz represented the Unsecured Creditors Committee in the Adelphia bankruptcy proceedings, and continued as the Trust's counsel to pursue a variety of other claims, including fraudulent conveyance claims, on behalf of Adelphia’s unpaid creditors.
- Freescale Semiconductor in defending against injunctive and damages litigation by senior lenders who claimed that a Material Adverse Change had occurred, and that their interests were diluted, when the company issued incremental debt of $750 million for use in a crucial debt refinancing.
- Fontainebleau Las Vegas Holdings, LLC in litigation against numerous lenders relating to the development of the multi-billion-dollar destination casino-resort at the north end of the Las Vegas strip.
- Interstate Bakeries Corp. as special litigation counsel in order to enforce commitments to provide $600 million in exit financing for IBC to emerge from Chapter 11 bankruptcy.
- Lightstone Holdings LLC ("Lightstone"), a commercial real estate investor and one of its affiliated entities, in defense of separate actions brought by two groups of lenders, each of which sought to enforce a $100 million non-recourse carve-out guarantee relating to the $8 billion financing through which the investor and Lightstone acquired the Extended Stay Hotel chain.
- Teachers Insurance and Annuity Association, New York Life Insurance Company, Angelo Gordon & Co., and other investors in their successful action against State Street Bank and Trust Company seeking tens of millions of dollars arising from State Street’s failure to deliver a document to a collateral trustee, resulting in the plaintiffs receiving less when the issuer filed for bankruptcy protection.
- The Liquidation Trustee of the Le-Nature’s Liquidation Trust, which was formed under the plan of reorganization in the Chapter 11 case of Le-Nature’s, Inc. In the multi-district litigation, Kasowitz brought claims against, among others, Wachovia, CIT, and Krones AG, a major German manufacturer, for their participation and substantial assistance in Le-Nature's massive Ponzi scheme. Kasowitz also separately brought claims against BDO Seidman LLP in a related arbitration. Together with the Liquidation Trustee, Kasowitz achieved multiple settlements with defendant parties.
- A special purpose entity formed by Clayton, Dubilier & Rice, Bain Capital and Carlyle Investment Management, LLC, in their dispute against JPMorgan Chase, Lehman Brothers and Merrill Lynch concerning the banks’ refusal, based on allegations of Material Adverse Changes, to finance their $10 billion acquisition of Home Depot Supply.
- Fortress Investment Group affiliates in their actions against AIG subsidiary MorEquity, Inc. to require MorEquity to sell to plaintiffs certain unique residential mortgage loans and residential real estate, with an approximate unpaid principal balance in excess of $554 million.
- Funds controlled by The Yucaipa Companies ("Yucaipa"), in their dispute against CIT stemming from CIT’s activities as Administrative and Collateral Agent in a $260 million secured commercial credit facility under which Yucaipa’s portfolio company (Allied) emerged from bankruptcy. Among other things, Yucaipa alleged that CIT breached its duties when it refused to recognize certain amendments to the facility, failed to recognize Yucaipa as requisite lender and failed to honor Yucaipa’s instructions as majority lender under the facility. After extensive discovery and motion practice, the parties entered into a confidential settlement.
- Bay View Grand S.A. de C.V., a Mexican real estate development company, in defending several suits by JPMorgan Chase seeking acceleration of over $200 million in loan repayments and in pursuing actions against JPMorgan for its failed investment banking efforts on behalf of Bay View Grand.
- The former developer of Meadowlands Xanadu, a retail and entertainment complex with more than one million square feet of retail space, an indoor ski slope and other amenities, in its disputes with the lender group over a more than $1 billion financing commitment. Representation has included a successful appeal to the Appellate Division, First Department that reinstated the developer’s claims for breach of a construction loan agreement and related guaranty.
- Edge Group WAICCS LLC in its action against The Sapir Group LLC seeking, among other things, specific performance compelling Sapir to close on a multi-million-dollar acquisition of an interest in a limited liability company from Edge Group. Kasowitz successfully defeated Sapir’s motion for summary judgment, and obtained summary judgment on a substantial portion of the Edge Group's complaint.
Kasowitz has extensive experience in lender liability litigation, fraudulent conveyance cases and other litigation relating to a company’s capital structure. In recent years, Kasowitz has litigated high-profile cases in this area relating to Freescale Semiconductor, Adelphia, LyondellBasell, Mirant, Tribune and numerous real estate developers.