Special Situations

Overview

Global market volatility is the new normal. Unpredictable or deteriorating market conditions resulting in credit market dysfunction and dislocation may lead to special situations that require unconventional thinking and innovative strategies. A special situation can arise in any industry during any point in the business cycle and spans everything from opportunistic investments to restructuring debt loads.

Stradley Ronon attorneys have decades of experience marshaling the resources needed to provide creative solutions as we guide our clients through unique investment and business challenges across the full spectrum of capital structures. Our goal is to assist clients in maximizing investment opportunities, value or recovery; limiting potential loss or liability; and keeping reputations intact.

Our Capabilities
Stradley Ronon’s special situations group brings leadership and focus in dealing with sophisticated and sensitive legal issues while seeking successful outcomes for our clients. Our interdisciplinary group members regularly work in the alternative asset, hedge fund, investment management, lending, private equity, real estate and specialty asset markets and are attuned to the risks inherent in investing in these assets. From cutting edge capital raises and structures to strategic complex derivatives to complex restructurings, our attorneys are skilled at executing transactions expeditiously and cost effectively.

The core special situations group will evaluate the issues and procure a coordinated team of senior attorneys who possess the relevant experience and deep industry knowledge to design and execute an action plan. The special situations team attorneys are available from a diverse array of transactional and advisory disciplines spanning securities (including the ’33 Act, the ’34 Act and the ’40 Act); corporate; litigation; finance and restructuring; bankruptcy, workouts and creditors’ rights; mergers and acquisitions; white-collar defense, internal investigations and corporate compliance; and SEC and FINRA enforcement. This team will work seamlessly to quickly size up the situation and develop effective business and legal strategies to resolve challenging problems or capitalize on opportunities.

Our Experience

  • Acquisition and disposition of distressed assets
  • Acquisition financing and distressed debt investing:
    • Challenged debt and equity investments
    • Debt financings
  • Ancillary issues that impact distressed asset investors:
    • Credit default swaps
    • Derivatives
    • Interest rate derivatives
    • Licensing and other regulatory matters
    • Repos and securities lending programs
    • Tax
  • Bankruptcy and work-out matters:
    • Bankruptcy and work-out counseling
    • Bankruptcy financing
    • Claim purchases
    • §363 plan of reorganization sales and acquisition of assets, including stalking horse bids
    • Debt restructuring
    • Debtor/creditor rights and remedies
    • Pre-bankruptcy forbearance arrangements
    • Dispute resolution
  • Board/management disputes
  • Defending against lender liability claims and professional liability claims
  • Formation and structuring of investment vehicles and funds that acquire distressed assets, including hedge and private equity funds
  • Fraud investigations
  • Investment Company Act of 1940, The Securities Act of 1933 and The Securities Exchange Act of 1934
  • Partner disputes
  • SEC and FINRA enforcement inquiries, internal investigations and examinations
  • Side pocket investments, illiquid or troubled debt and equity investments
  • Strategies to maximize return on distressed assets:
    • Bankruptcy
    • Contractual rights and remedies
    • Litigation
    • Restructuring distressed equity and debt transactions
  • Structuring and documenting new debt financings and equity investments, including secured and unsecured financings; single-lender and syndicated loans; unitranche facilities; send lien, mezzanine and subordinated facilities; structured finance; and cross-border transactions
  • Unique, asset-specific issues and risks:

    • Debt securities (ABS, RMBS, CMBS, CDOs)
    • Distressed businesses
    • Investor redemptions
    • Liquidating existing investments
    • Loans (mortgage loans, commercial loans)
    • Real estate

Industry Experience
  • Agriculture/Food Suppliers – Growers and Distributors
  • Airlines
  • Alternative Energy
  • Asset Management
  • Automotive
  • Apparel – Importers, Distributors and Textile Manufacturers
  • Banking and Finance
  • BDCs
  • Broadcasting
  • Chemicals
  • Commodity Trading
  • Consumer Products
  • E-Commerce
  • Energy
  • Environmental
  • ETFs
  • Gaming and Entertainment
  • Government Contracting
  • Healthcare
  • Hedge Funds
  • Importing
  • Insurance
  • Intellectual Property
  • Jewelry and Fine Art
  • Labor
  • Leasing
  • Manufacturers and Distributors
  • Maritime and Shipping
  • Mutual Funds
  • Oil, Gas and Mining
  • Paper Products
  • Pharmaceuticals and Biotechnology
  • Precious/Nonprecious Metals
  • Private Equity
  • Real Estate
  • Retailing
  • Securities
  • Staffing
  • Technology
  • Telecommunications
  • Tobacco
  • Trucking and Other Transportation Business
  • Venture Capital
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Representative Matters

Our representative matters include:

  • assisting a global private equity firm in managing a portfolio of distressed RMBS residual securities, including negotiating document access rights and repurchase of underlying mortgage loans for breach of representations and warranties
  • counseling a group of investors on formation and structuring of investment vehicle and acquisition of portfolio of scratch-and-dent residential mortgage loans from large national mortgage lender
  • counseling numerous investment firms and financial institutions on their rights and remedies under various investment contracts and instruments with a major investment bank in connection with its bankruptcy and restructuring
  • forming a distressed asset opportunity fund with hedge fund structure for the purpose of investing in distressed iconic sporting and lodging properties and related mortgage loans
  • forming a distressed asset opportunity fund with hedge fund structure for the purpose of investing in distressed MBS, ABS and CDO securities
  • forming a distressed asset opportunity fund with private equity structure for the purpose of investing in debt and equity securities of companies undergoing financial distress, operating difficulties or significant restructuring, both directly and indirectly through investments in funds with similar investment strategies
  • representing a global mutual fund complex in connection with its distressed loan trading program, including negotiating and documenting trades
  • representing several substantial financial institution creditors in the Lehman Brothers bankruptcy in the filing, trading and settlement of claims
  • representing the financial guarantors of special revenue obligation bonds in the restructuring of over $2 billion of debt relating to a casino owned and operated by a Native American tribal nation in the state of Connecticut
  • representing the loan trustee, on behalf of the bondholders, in a Section 363 sale, pursuant to U.S. Bankruptcy Court order, of substantially all of the assets of a holding company active within the oil and gas sector that built elevating support vessels that facilitated well intervention activities and work-over services to the offshore oil and gas industry
  • counseling an independent investment advisory firm in the restructuring of the outstanding debt, and the issuance of convertible preferred stock, of one of its portfolio companies
  • representing a public utility supplying electric energy to customers in Maryland and the District of Columbia in the bankruptcy of a power generating company that attempted to reject certain portions, but not all, of an asset purchase agreement between the parties
  • counseling a national law firm in its separation from certain of its practice groups as a result of its combination with an international law firm
  • counseling a partner in a series of Washington, DC real estate partnerships in a complex and hostile renegotiation of partnership governance and economic relationships, and assisted in the representation of a different partner in the partnerships in subsequent arbitration proceedings relating to the renegotiated relationships
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