Bankruptcy Practice Group

Expertise in the insolvency arena has long been a fundamental strength of Hahn & Hessen.

From our origins representing textile mills and factors (purchasers of accounts receivable) in New York's habitually undercapitalized garment industry, this group has evolved into a national practice with a reputation for excellence in the most sophisticated cases.

We are regularly engaged in matters around the country on cases of national and even international interest. Our experience is broad and reflective of economic trends: recent cases include retailers, mortgage bankers, equipment lessors, hedge funds, airlines, an oil and gas company, healthcare suppliers, manufacturers and environmental remediation concerns.

Although our typical client in a restructuring or reorganization is a financial institution (or group of such institutions) which has extended credit and has its position collateralized by assets, our representations extend to every player in an insolvency situation: lessors and lessees, repo, swap and other capital market participants, trade creditors, hedge funds, indenture trustees and debtholders of all classes, purchasers of assets and claims, preferred and common shareholders and financial advisors.

In more "official" capacities in bankruptcy cases, we serve as counsel to committees of creditors and other interest holders, Chapter 11 and Chapter 7 trustees and examiners as well as, in appropriate circumstances, the debtors themselves.

In the specialized world of broker-dealer liquidations, one of our partners has regularly been selected by the Securities Investor Protection Corporation to serve as SIPC Trustee, with the firm acting as his counsel.

We have also successfully acted as amicus counsel to The Bond Market Association in cases of great importance to that industry.

The nature of our clients is such that issues concerning the Bankruptcy Code and other state and federal insolvency-related legislation constantly arise in the course of not only their risk management but also their new business activities, and we counsel them on their concerns. By way of example, our advice has been sought concerning a number of opportunities (and insolvency-related risks) arising out of the explosive growth of the internet.

The following is a sample of recent matters in which we are or have been engaged. Where the matter is not public, we have not disclosed our representation.

Client	Matter (Location)	Original Exposure
Lehman Brothers	First Alliance Mortgage (Orange County, California)	$70 Million plus warrants
Full Service Investment Bank	Publicly traded equipment leasing company (Pacific Northwest)	$150 Million
Chase Manhattan Bank, As agent	Smith Technology Corporation (Delaware)	$32 Million
IBJ Whitehall, As agent	Graham-Field (Delaware)	$40 Million
Full Service Investment Bank	Publicly traded mortgage bank (Texas)	$72 Million
Fuji Bank	CFS (Oklahoma)	$30 Million
Full Service Investment Bank	Publicly traded retail drug chain (New York City)	$20 Million
American Express	Tower Air (Delaware)	Unknown
First Union	Southern Pacific Funding Corp. (Oregon)	$300 Million secured facility
First Union	Harbor Financial Mortage Corp. (Texas)	$40 Million participant in secured facility
CIT Business Credit	CNB International (Buffalo, New York)	$40 Million secured facility
GMAC Commercial Credit	Trans Texas Gas Corp. (Texas)	$55 Million secured exit facility
Lehman Brothers	Criimi/Mae (Maryland)	$70 Million
Indenture Trustee	Just for Feet (Delaware)	$200 Million bond issue
Indenture Trustee	Hedstrom Corporation (Delaware)	$200 Million bond
Official Creditors Committee	Petrie Stores Corporation (New York City)	N/A
Official Creditors Committee	Joan and David Helpern (New York City)	N/A
Gilbert Backenroth, As SIPC Trustee	G.F.B. Securities, Inc. (New York City)	N/A
Internet Financial Services Start Up	Risk Management and documentation (San Francisco)	N/A

Our bankruptcy practice group has been involved in a number of decisions through the years which have impacted the practice of bankruptcy law. Some of these decisions (and the reasons they are important) are listed below:

Granite Partners, L.P., et al. v. Bear Stearns & Co., Inc., et al., 17 F.Supp.2d 275 (S.D.N.Y. 1998). (Counsel to The Bond Market Association, as amicus curiae.) Case held that industry standard form repurchase agreements are to be treated, as a matter of law, as purchase and sale agreements and not secured loans subject to Article 9 of the UCC.

In re Hamilton Taft & Co., 114 F.3d 991 (9th Cir. 1997). (Counsel to The Bond Market Association, as amicus curiae.) Section 546(f) was merely intended to augment, and not supercede, Section 546(e) of the Bankruptcy Code.

In re Kaiser Steel Corp., 952 F.2d 1230 (10th Cir. 1991). (Counsel to Bear Stearns & Co., Smith Barney, Cowen & Co. and others.) Payments received by shareholders of a public company through the settlement system are insulated from the fraudulent conveyances laws by virtue of Section 546(e) of the Bankruptcy Code.

Matter of Bevill, Bressler & Schulman Asset Management Corp., 67 B.R. 557 (D.N.J. 1986). (Co-counsel to Unofficial Repo Holders Committee.) The proper workings of the market for treasury and agency securities requires a determination that repurchase transactions are purchases and sales of securities.

In re Johns-Manville Corp., 801 F.2d 60 (2d Cir. 1986). (Counsel to Committee of Equity Security Holders.) Corporate democracy is not abrogated by a Chapter 11 filing.

In re Texlon Corp., 596 F.2d 1092 (2d Cir. 1979). (Counsel to Manufacturers Hanover Commercial Corporation.) Although cross-collateralization of a pre-petition loan by a post-petition lender is proper, it is not permissible when notice to affected creditors is insufficient.

In re Leasing Consultants, Inc., 486 F.2d 367 (2d Cir. 1973). (Counsel to Trustee.) Established law concerning proper perfection under UCC Article 9 of leased equipment under true leases.

In re Avorn Dress Co., Inc., 79 F.2d 337 (2d Cir. 1936). (Counsel to Appellee.) Although the holding of this case is relatively unimportant today, we include this case to point out that our firm has successfully argued bankruptcy appeals for over sixty years.