Creditors' Rights and Bankruptcy

 Schenck Price’s Creditors’ Rights and Bankruptcy Practice Group is dedicated to working with its clients to develop strategies for minimizing losses, swiftly pursuing delinquent debtors and leveraging assets to secure optimal recoveries.  The Firm’s trademark is to pursue its clients’ rights aggressively and seek a recovery from all available entities, whether that involves piercing a corporate veil or searching for and attaching collateral in multiple jurisdictions.

Drawing from the Firm’s corporate, commercial litigation, regulatory, tax, real estate, intellectual property and banking practice groups, Schenck Price delivers the tailored and personalized solutions required to protect the Firm’s clients in the face of the ever-evolving complexities of the business world.  Our clients include regional, national and international banks and lenders, loan servicers, landlords and property owners, material suppliers and other trade creditors. 

We counsel clients on how to structure their transactions, whether lending facilities or investments, in a way that protects their right of recovery under situations where the borrower or other entity is distressed or where it enters bankruptcy.  In connection with those services, we evaluate lien positions, potential environmental issues, loan documents and the respective rights of parties thereunder, inter-creditor arrangements, claims against carriers and other insurance providers or professionals and set-off rights, among other issues.  We also draft and analyze forbearance arrangements, loan modifications and structured settlements.  Schenck Price attorneys have the decades of experience necessary to negotiate and implement the protections required by its clients, whether by notes, guarantees or mortgages, before extending credit to a business counterpart.

When litigation becomes necessary to further our clients’ objectives, whether protecting clients’ rights in an assignment for the benefit of creditors, workout litigation or bankruptcy, Schenck Price’s litigators can help your business as they have helped other clients throughout our 110-year history. The Firm’s stable of Certified Civil Trial Attorneys, with vast experience litigating commercial matters before judges, juries and arbitrators, has the expertise and reputation necessary to assist clients in negotiating favorable terms for the repayment of a distressed debt and to determine whether litigation is a sensible further investment of your resources. That experience and reputation is grounded in having handled hundreds of matters for secured and unsecured lenders in state and federal courts involving the Uniform Commercial Code, the Uniform Fraudulent Transfer Act, lien priorities, security interests, state receivership law and foreclosure.

Given the Firm's extensive experience protecting its creditor clients, our Firm has the expertise and knowledge to protect clients who must defend against creditors.

We are also noted for our experience and proficiency in the bankruptcy forum.  By way of example, we defend against preference and fraudulent transfer actions, represent prospective purchasers of assets in bankruptcy cases, represent landlords affected by a tenant’s bankruptcy filing, seek relief from the automatic stay, prosecute non-dischargeability actions, file proofs of claim and defend against claim objections. 


Representative Matters

• Secured six-figure judgment on behalf of a client against former employee who surreptitiously stole inventory from the client and sold the stolen items on the web, pocketing his illicit returns while also earning a salary from the client; the court entered a judgment for the value of the stolen inventory as well as disgorged salary.

• Represented a bank in connection with contentious law division and foreclosure litigation involving counterclaims of fraud and consumer fraud asserted against the bank; our Firm secured a complete summary judgment in the bank’s favor on all claims asserted in the litigation.

• Represented a New Jersey construction materials supplier in connection with bankruptcy of general counsel; recovered majority of outstanding obligation as a result of quick action in filing a bond claim with payment bond company and pursuing proof of claim in bankruptcy case.

• Represented several investors who were victims of a real estate investment Ponzi-scheme; after the investment enterprise filed for bankruptcy, our Firm, in collaboration with investors represented by other counsel, successfully negotiated and secured the appointment of a neutral chief reorganization officer and independent board of directors to usher the enterprise through bankruptcy.

• Represented several landlords in connection with the recent bankruptcy of a national pharmacy chain; our Firm promptly pursued rejection damages and administrative expense claims on behalf of a landlord whose lease was rejected and we effectively negotiated lease amendments for landlords whose leases were subject to assumption.

• Represented multiple businesses in connection with fraudulent transfer claims asserted by the Chapter 7 trustee of a defunct technology company whose principal was accused of using company assets to satisfy personal debts.

• Secured six-figure settlement in connection with lawsuit in which our Firm represented third-party beneficiaries of a promissory note drafted by an inexperienced, non-lawyer decedent and the obligors asserted a novel novation defense and denied all liability under the note.

• Successfully investigated and uncovered fraud perpetrated by a borrower and its guarantors against the Firm’s banking client; in this case, the guarantors submitted doctored, fraudulent financial documentation to inflate the value of their assets.