Mark Campbell LawMark Campbell Law
Mark Campbell Law
  300 S. Harbor Blvd., Suite 700
Anaheim • California 92805
Mark Campbell Law
Mark Campbell Law
     
  Case Notes
 
     

CHAPTER 11

CLIENT DILEMMA:
The Clients, as part owners and secured creditors of a limited liability company ("LLC"), found themselves embroiled in a chapter 11 case filed by the LLC's managing members. The sole asset of the LLC was a 192 unit apartment building ("Building") valued between $18 and $19 million. Just prior to the bankruptcy filing, Clients were in arbitration with the managing members disputing the validity and value of Clients' trust deed ("Trust Deed") against the Building. The chapter 11 case was commenced by the managing members in an attempt to escape the pending arbitration and use the avoidance powers available under chapter 11 to void Clients' lien. The attorneys for the LLC, under the direction of the managing members, were successfully moving as quickly as possible to accomplish their goals. After the initial attorneys for Clients made multiple unsuccessful attempts to either dismiss the chapter 11 case or resume the arbitration, Clients looked to the Firm for a solution.

FIRM SOLUTION:
Mr. Campbell responded by quickly mastering decades of complex facts relating to the initial development of the Building, including numerous changes in the financing arrangements and reformations of the holding entity, which all led to the dispute over the Trust Deed. Despite severe time constraints, Mr. Campbell was still able to develop unique arguments and approaches to the dispute which put a halt to the progress being made by the managing members within the chapter 11 case. Mr. Campbell then negotiated an extremely favorable settlement which was very well received by Clients.



CLIENT DILEMMA:
A large manufacturer of metal components and products ("Debtor") was forced to file a chapter 11 case due to the pressure being exerted by its primary secured creditor ("Secured Creditor"). In fact, Secured Creditor had a validated and perfected blanket lien on all the assets of Debtor. Moreover, the value of Secured Creditor's lien was more than twice the value of Debtor, whether on an operating or liquidating basis. Thus, it appeared that the unsecured creditors of Debtor were not going to receive a nickel in debt repayment, though Debtor owed them over $2 million. Thus, the committee for the unsecured creditors ("Client") looked to the Firm for a solution.

FIRM SOLUTION:
Mr. Campbell worked with the Debtor and Secured Creditor to negotiate a percentage payment on the unsecured debt. This payment was to be made by the reorganized debtor in exchange for the cooperation of Client in the approval of the joint plan of reorganization filed by Debtor and Secured Creditor. Accordingly, rather than receiving nothing, Client was able to at least receive some repayment, while also continuing to do business with the reorganized debtor.


 
Mark Campbell Law
Mark Campbell Law