Creditors' Rights and Bankruptcy — Recent Engagements

Recently, the group has handled a number of notable matters, including the representation of:

• The Boyds Collection, Ltd. in the Chapter 11 cases of affiliated companies that are leading designers, marketers and distributors of high-quality, hand-crafted collectibles, gifts and other specialty products.
• The court-appointed future claimants' representative in connection with the negotiation and successful confirmation of Combustion Engineering, Inc.'s plan of reorganization, which resulted in the establishment of a trust with more than $1 billion in assets for the benefit of future asbestos claimants.  Orrick continues to represent the future claimants’ representative in connection with the trust as it processes and pays asbestos personal injury claims.
• The court-appointed future claimants' representative in connection with the Chapter 11 proceedings of Congoleum Corporation, a flooring manufacturer, and its affiliates.  Orrick is actively involved in all aspects of the complex and extremely litigious case, including plan confirmation issues, valuation issues and insurance coverage matters.
• Cooper Industries, Ltd., a principal creditor and holder of an indemnity claim of more than $480 million, in connection with the restructuring proceedings of Federal-Mogul, a world-wide manufacturer and distributor of automotive products.  The company has reached agreement with the debtors, subject to court approval, regarding a transaction that contemplates a contribution by the company to an asbestos settlement trust in exchange for the protection of a channeling injunction.
• The Official Committee of Retirees appointed in the Delaware Chapter 11 case of Kaiser Aluminum Corporation.  Under the plan of reorganization, which was approved by the bankruptcy court in January 2006, retirees will become majority owners of the reorganized company's stock, in compensation for their loss of medical insurance.  That stock, together with cash to be received, may have a value of tens of millions of dollars which may cause retirees to realize nearly full recovery, in a case in which general unsecured creditors are receiving stock worth less than three cents per dollar owed, and the old shareholders will receive nothing.
• The Official Committee of Unsecured Creditors of Reliance Group Holdings, Inc., the holding company of one of the largest U.S. insurance companies with approximately $500 million of public debt and an additional $250 million in bank debt. Orrick negotiated, drafted and obtained bankruptcy court approval of plans of reorganization for Reliance Group Holdings and Reliance Financial Services Corporation, which were overwhelmingly approved by the creditors.  Through Orrick's efforts, the value of the unsecured bonds increased by over 3,500 percent.  With $12.6 billion in assets, Reliance was one of the largest bankruptcies in U.S. history.  Orrick continues to represent the RGH Liquidating Trust.
• New England Power Company as a creditor in the Chapter 11 cases of National Energy & Gas Transmission, Inc. and its affiliates.  Orrick lawyers also represented the California Independent System Operator Corporation and PJM Interconnection, LLC as defendants in connection with actions by the debtors to avoid payments made under FERC-approved tariffs, and were successful in getting such actions dismissed.
• Various subsidiaries of National Grid USA as creditors in the Chapter 11 cases of National Energy and Gas Transmission, Inc.and its affiliates.  The subsidiaries’ claims, totaling in excess of $200 million, were paid in full.  Orrick lawyers also represented the California Independent System Operator Corporation and PJM Interconnection, LLC as defendants in connection with actions by the debtors to avoid payments made under FERC-approved tariffs, and were successful in getting such actions dismissed.
• Potomac Electric Power Company (Pepco) in complex, cutting-edge litigation concerning the ability of Mirant Corporation, a debtor power generator, to reject electric power contracts.  Our defense of Pepco resulted in new law in the U.S. Court of Appeals for the Fifth Circuit that requires courts to consider the public interest before approving the rejection of a power contract.
• Quickturn Design Systems, Inc. in the elevation of its lien against the assets of Aptix Corporation, from second to first priority, which was affirmed on appeal to the U.S. Court of Appeals for the Federal Circuit, followed by denial of certiorari by the U.S. Supreme Court.  During that process, the business was sold as a going-concern in the Chapter 11 case of Aptix, with essentially all proceeds being paid to Quickturn, a subsidiary of Cadence Design Systems, Inc.
• The SWE&C Liquidating Trust (successor to debtor Stone & Webster Engineers & Constructors, Inc. and its direct and indirect subsidiaries) in the Chapter 11 cases of Stone & Webster, Incorporated, which was one of the premier international engineering and construction enterprises.  In the bankruptcy cases, Orrick represented the Official Committee of Unsecured Creditors and were plan proponents that created the SWE&C Liquidating Trust.  Orrick is representing the SWE&C Liquidating Trust in connection with the continuing liquidation of the remaining assets of the SWE&C Liquidating Trust and the resolution of claims filed against the Consolidated SWE&C Estate totaling in excess of $2 billion.
  
• The court-appointed future asbestos claimants’ representative in connection with the Chapter 11 proceedings of W. R. Grace & Co. and its affiliates, a multibillion dollar specialty chemicals company.  There presently is extensive litigation among the future claimants representatives, the debtors and others concerning the anticipated level of present and future asbestos claims, the debtors' enterprise value and solvency, and numerous other issues in which Orrick lawyers play a major role.  Orrick is actively involved in all aspects of this bankruptcy case, working on behalf of the interests of the presently unknown individuals who will in the future develop asbestos-related diseases for which W. R. Grace is liable.   

Other Recent Matters

Following is a representative list of other major reorganization matters in which we have played a significant role:

• AmeriServe Food Distribution, Inc.
• Aptix Corporation
• The Boyds Collection, Ltd.
• Calpine Corporation
• Classic Communications, Inc.
• Colo.com
• Combustion Engineering, Inc.
• Congoleum Corporation
• Conseco, Inc.
• CreditTrust Corporation
• Delphi Corporation
• Delta Air Lines, Inc.
• Enron Corp.
• EOTT Energy Partners, L.P.
• Federal-Mogul Corporation
• Huntsman International Holdings LLC
• IMPATH Inc.
• Intira Corporation (now known as Divine, Inc.)
• IRM Corporation
• Kaiser Aluminum Corporation
• MacArthur Company
• Mirant Corporation
• National Energy & Gas Transmission, Inc.
• Northwest Airlines Corporation
• NRG Energy, Inc.
• Philippine Airlines, Inc.
• The Power Company of America, LP
• PhyAmerica (now known as Sterling Healthcare)
• PSINet, Inc.
• RCM Global Technology
• Refco Inc.
• Reliance Group Holdings, Inc.
• Shook &  Fletcher Insulation Co.
• Stelco Inc.
• Stone & Webster, Inc.
• Trace Foam Sub, Inc.
• Trace International Holdings, Inc.
• US Airways Group, Inc. I and II
• USA Capital Diversified Trust Deed Fund, LLC
• USGen New England, Inc.
• Viação Aérea Rio-Grandense, S.A. (VARIG)
• Western MacArthur Company
• W.R. Grace & Co.