BRIG Mid-Year Review 2023

2023 mid-year review

Business Restructuring + Insolvency Group

Matter Summaries

Awards + Rankings

Team

Mediation

Distressed Real Estate

Insurance Insolvencies

Banks

Creditors’ Committees & Creditors

Investment Funds

Debtors

CalPlant I, LLC Over the past several years, our team has continued to represent companies that focus on sustainability. For example, we continued to represent CalPlant I, LLC, a first-of-its-kind plant located in Northern California that manufactures sustainably sourced building products. The team has been counseling the company on various sale opportunities and potentially valuable litigation claims in connection with the overall restructuring of over $500 million in debt. Columbia Pulp I, LLC We also represent the receiver of Columbia Pulp I, LLC, one of North America’s first producers of wheat straw pulp, which is used as sustainable feedstock for paper and packaging products. The team has been assisting the receiver in navigating various financial and operational aspects of the receivership while exploring sale opportunities and other strategic alternatives for the facilities. Not-for-Profit We serve as counsel to the Hale House Center, Inc., a Harlem-based not-for-profit founded in the early 1970s by Clara “Mother” Hale. While Mother Hale was alive, the Hale House Center cared for hundreds of children born addicted to heroin, methadone, cocaine, alcohol, crack cocaine, and other substances. In recent years, the Hale House Center has been unable to raise sufficient funds to carry out its mission. Due to these ongoing financial difficulties, the Hale House Center made the decision to phase out its programs and wind down.

Matter Summaries

Mediation

Former Judge James M. Peck is highly regarded in the restructuring community for his achievements as mediator of the most contentious and complex commercial disputes. Jim’s record of mediation success continued in 2022 in a number of significant court-ordered and private mediations, including the plan mediation in Gulf Coast Health Care; serving on the mediation team that resolved the enormously complicated D&O litigation in Sears Holdings; and resolving contested material claims arising under foreign law in MatlinPatterson. Jim also privately facilitated the recently concluded an out-of-court claim resolution process involving multibillion dollar claims of the dealer counterparty creditors of Archegos Fund and Archegos Capital Management. The successful engagement benefited all parties involved by avoiding the expense, delay, and potential value destruction of a formal bankruptcy case.

Distressed Real Estate

Together with our industry-leading Real Estate Group, we represented clients in connection with a number of distressed real estate investments, including the Related Group, in recouping over $350 million in claims in connection with the chapter 11 cases of Great Value Storage. We also represented CIBC, TIAA/Nuveen, JPMorgan, and M&T in connection with foreclosures, potential foreclosures, contentious litigation, and bankruptcies arising from distressed real estate investments. Additionally, we represented JP Morgan Chase Bank (“Chase Bank”) as the largest secured lender in the chapter 11 cases of Professional Financial Investors, Inc. (PFI) in the U.S. Bankruptcy Court for the Northern District of California. Prior to PFI’s bankruptcy filing, PFI engaged in a massive real estate Ponzi scheme in the Bay Area that defrauded investors of hundreds of millions of dollars. Chase Bank asserted a prepetition secured claim against PFI that exceeded $75 million, and Chase Bank received a full recovery under the confirmed chapter 11 plan of reorganization after PFI’s portfolio of real estate was sold to Hamilton Zanze & Co.

Insurance Insolvencies

We continue to advise our clients in connection with complex, cutting-edge insurance insolvency matters. Unlike in a typical corporate chapter 11 case, insurance insolvencies often involve debtors with not only voluminous inward claims, but also many outward claims against reinsurers. In many cases, an insolvent insurer may have inward and outward claims in respect of the same solvent insurer or group of solvent insurers. We advise our clients on novel strategies to limit their net exposure to insolvent insurers and to manage the negative impact that can arise due to uncertainty regarding the development of long-tail claims (such as claims arising from asbestos or talc exposure) throughout the duration of an insurance liquidation proceeding. During 2022, we saw the culmination of a strategy to stop the accrual of new claims against our client and accelerate the wind down of an insurance company that has been liquidating for more than 20 years, thereby reducing the potential future exposure that could be faced by our client in the future.

Banks

We are representing a large U.S.-based commercial bank in its capacity as a secured lender in several ongoing matters including: Operator of Digital and Brick-and-Mortar, Full-Service Specialty Pharmacies We successfully negotiated with the debtors, the committee of unsecured creditors, and other parties in interest regarding a variety of cash collateral and sale issues. Applied Radiomics Company We successfully negotiated the terms for the consensual use of the bank’s cash collateral and secured a significant paydown of the loan facility from the proceeds of the sale of substantially all of the debtor’s assets under section 363 of the Bankruptcy Code. Cloud Manufacturing and Digital Supply Chain Company We successfully negotiated the terms for the consensual use of the bank’s cash collateral and secured full repayment of the bank’s loan facility from the proceeds of the sale of substantially all of the debtor’s assets under section 363 of the Bankruptcy Code. Biopharmaceutical Company We successfully negotiated the terms for the consensual use of the bank’s cash collateral and secured full repayment of the bank’s loan facility from the proceeds of the sale of the debtor’s intellectual property under section 363 of the Bankruptcy Code.

Distressed/363 Sales

Acquisition of Virtual Work Platforms Alongside our technology-focused Corporate Group, we represented VMWare, Inc. in its acquisition of the assets of Ananda Networks, an Israeli start-up. VMWare’s purchase through a section 363 sale in Ananda’s chapter 11 case allowed for an efficient acquisition involving unique assets, including intellectual property. Acquisition of School Meals Provider We also represented Revolution Foods, PBC, a San Francisco-based public benefit corporation, in its acquisition of the assets of Better 4 You Breakfast, Inc. (B4Y) through B4Y’s chapter 11 proceeding. Revolution Foods’ acquisition will enable it to further expand on its mission to bring healthy food to underserved communities. Sale of Online Auto Leasing Platform Additionally, we represented a global technology investment company as a lender under a $305 million secured credit facility in connection with distressed collateral sales in the technology and vehicle leasing spaces. The sales were conducted entirely out of- court and included the sale of a used auto fleet consisting of approximately 9,000 vehicles, a sale of loan receivables, and a sale of the borrower’s IP platform and related technology to a strategic buyer.

Creditors’ Committees & Creditors

Clovis Oncology We are counsel to the official committee of unsecured creditors of Clovis Oncology, Inc., and its affiliated debtors. Clovis is a biopharmaceutical company focused on acquiring, developing, and commercializing cancer treatments in the United States and abroad. Clovis filed for chapter 11 to implement a sale of the company’s assets pursuant to section 363 of the Bankruptcy Code. Prior to the chapter 11 filing, Clovis entered into a stalking horse purchase and assignment agreement to acquire Clovis’s rights to its pipeline clinical candidate—FAP-2286—as a therapeutic agent for an upfront payment of $50 million, plus up to $630.75 million in potential future milestone payments. During the course of the chapter 11 case, Clovis marketed and sold its other key asset, commercially marketed cancer treatment Rubraca, to pharma& Schweiz GmbH for an upfront payment of $70 million, plus up to $65 million in potential future milestone payments. In addition to advising on these sale transactions, the MoFo team also investigated and filed a standing motion asserting claims against Clovis’s prepetition secured lender, including claims to recharacterize up to $347 million of purportedly secured debt or, alternatively, to disallow up to $175 million in unaccrued interest as of Clovis’s petition date. These claims are currently scheduled to be litigated in connection with confirmation of Clovis’s chapter 11 plan. This engagement exemplifies the extent to which the MoFo restructuring practice is able to draw from the firm’s deep bench in other specialty practice groups, such as FDA Regulatory & Compliance, Finance, and Litigation, to provide a full range of legal services to the committee. Nevro We also represented Nevro Corp. in its continued enforcement of multiple patents used in the development and production of its products. Nevro develops industry-leading medical devices that provide paresthesia-free treatment for chronic pain, including in the spinal cord region. Among other actions, Morrison Foerster is advising Nevro in connection with Stimwave Technologies, Inc.’s bankruptcy proceeding in which Stimwave sought to reject and sell its asset free and clear of certain of Nevro’s rights under a settlement agreement resolving prior patent infringement litigation and a corresponding judgment. United Parcel Service We also represented creditors in bankruptcy litigation matters. For example, we successfully obtained summary judgment for United Parcel Service, Inc., dismissing a $12 million, plus interest, preference claim brought by a litigation trustee in connection with the Toys “R” Us chapter 11 cases. UCC of Peer Street We are counsel to the official committee of unsecured creditors of Peer Street, Inc., and its affiliated debtors. Peer Street is a California-based real estate investing platform that developed a marketplace connecting lenders and borrowers seeking capital to investors looking for real estate-related debt. Peer Street filed for chapter 11 following macroeconomic pressure brought on in part by historic interest rate volatility, declining revenues, and lack of access to funding sources. Peer Street is in the process of marketing its assets, and we have been engaged with the Debtors in evaluating both the sale process and potential alternative transactions. UCC of Incora/Wesco We are counsel to the official committee of unsecured creditors of Wesco Aircraft Holdings, Inc., and its affiliated debtors (“Wesco” or “Incora”). Incora is an aircraft equipment supplier to end users in the United States and abroad. Incora filed for chapter 11 due to financial and operational difficulties, including uncertainty in the travel industry and supply chain issues owing to the COVID-19 pandemic. In March 2022, Incora conducted a two-step liability management transaction that restructured the company’s capital structure. The so-called 2022 Transaction is subject to litigation—two state court actions brought by certain noteholders prior to the chapter 11 filing and an adversary proceeding brought by Incora. The matter is ongoing, and the MoFo team is advising the committee on a number of issues, including those related to the 2022 Transaction as well as potential sources of recovery for the estate and unsecured creditors. This engagement represents yet another example of the MoFo team’s collaborative efforts, drawing on our expertise across a number of specialty practice groups, including Bankruptcy, Finance, and Litigation.

Investment Funds

Commonwealth of Puerto Rico We concluded our representation of an ad hoc group of holders of constitutional debt, i.e., debt issued or guaranteed by the Commonwealth of Puerto Rico and entitled to priority under the Commonwealth Constitution, in connection with the Commonwealth’s restructuring under Title III of PROMESA (the law passed by Congress in 2016 authorizing Puerto Rico to seek bankruptcy-like protection). The members of the ad hoc group at one point held in excess of $3 billion face amount of constitutional debt, making it the largest bondholder group in the Commonwealth’s Title III case. The Commonwealth’s Title III case was one of the first cases to be administered under PROMESA and raised a host of complex and novel legal issues not typically present in a typical corporate restructuring. In March 2022, the Commonwealth’s plan of adjustment went effective, marking the Commonwealth’s return to capital markets nearly six years after its default. The culmination of the Commonwealth’s PROMESA proceeding marked our third successful restructuring of bond debt incurred by the Puerto Rico governmental entity, and we remain actively involved in efforts to restructure additional bond debt of Puerto Rico instrumentalities. Chinese Distressed Investors We have advised investment funds with respect to current and potential investments in convertible notes and other debt securities issued by distressed Chinese businesses in a number of industries, including media, telecommunications, and gaming. Chinese issuers can present unique challenges for offshore debtholders, due to, among other things, byzantine capital structures, the concentration of assets in China, and the hesitance of local Chinese courts to enforce judgments obtained abroad. These difficulties are compounded in instances where the issuer does business in regulated industries such as media or financial services, in which direct foreign investment is heavily restricted, if not prohibited, by Chinese law; as a result of these restrictions, the offshore entity (e.g., Cayman, BVI) that issues debt into international capital markets often does not have any equity ownership in the most valuable parts of the underlying business, further complicating enforcement efforts for investors.

2023 has been a remarkable year with the past several months displaying an upward trend for the Business Restructuring + Insolvency Group at Morrison Foerster. We would like to provide our friends and clients with an overview of our current matters, each of which demonstrate our track record of being a go-to firm for complex restructurings across industries and jurisdictions. As you will see, our roles have varied from representing companies and official and ad hoc committees to liquidators and trustees. In addition, we have been active in a number of industries, including technology, energy, retail, aerospace, and real estate. As always, we want to thank our clients and friends for a strong year.

Lorenzo Marinuzzi

Jennifer Marines

Pro Bono Matters

Make the Road New York

We, along with Make the Road New York—a non-profit legal services organization advocating on behalf of immigrant and working class communities—represented an individual in the chapter 7 bankruptcy of her former employer, to prevent the bankruptcy process from being used to discharge our client’s discrimination and harassment claims against him. Through motion practice and targeted discovery efforts, we were able to achieve a settlement of our client’s claims on favorable terms that not only will provide her with fair compensation for the harms she endured, but also with finality and closure as well.

Manhattan Legal Services

We continued to work with Manhattan Legal Services on advising a tenants’ association in connection with the chapter 11 cases of a portfolio of Harlem apartment buildings. During 2022, we oversaw the implementation of a hard-fought settlement that resolved over $1 million in claims held by tenants, ended a multi-year rent strike, and led to long-overdue repairs at the buildings.

Project Afghan Legal Assistance (Human Rights First)

We have been interviewing Afghan refugees to help connect them with lawyers who can assist in their asylum (and other immigration) applications. In some cases, our attorneys have taken on the applications themselves.

SCRIE/DRIE Applications (LSNYC)

We assisted various clients of Legal Services NYC with SCRIE and DRIE applications to be submitted to New York City’s Department of Finance. The Department runs this program to stabilize the rents of lower income families in the city.

Mid-Atlantic Innocence Project

Theresa Foudy serves as the partner supervisor for associates and summer associates who participate in screening cases for potential further investigation by the Mid-Atlantic Innocence Project.

LGBT Bar Association of Greater New York

Theresa Foudy supervised associates who drafted an amicus brief for the LGBT Bar Association of Greater New York (LeGaL) in connection with social impact litigation surrounding Yeshiva University's refusal to recognize an LGBTQ student group as an official University Club.

Awards + Rankings

Chambers Global 2023

• USA – Bankruptcy/Restructuring: The Elite | Band 3

The Deal, Global M&A, and T&W

IFLR1000 and GRR 100

The Legal 500

Chambers

Chambers USA 2023

• USA – Bankruptcy/Restructuring: The Elite | Band 3 • New York – Bankruptcy/Restructuring: The Elite | Band 3

• [MoFo] provides quality restructuring and insolvency expertise, most notably excelling on behalf of creditors' committees. • An impressive range of international work includes acting for international debtors in chapter 15 cases and working with bondholders, trustees, and liquidators in offshore restructuring and liquidation proceedings. • Frequently handles matters arising in the retail, energy, and financial services sectors.

• Restructuring (Including Bankruptcy): Corporate | Tier 3

The Legal 500 US 2023

Jennifer Marines Next Generation Partner

Lorenzo Marinuzzi Recommended

Theresa Foudy Recommended

James Peck Recommended

Jennifer Marines Highly Regarded New York, United States | Restructuring

• United States – New York: Restructuring and Insolvency | Tier 3 • United States – Restructuring and Insolvency | Tier 2 • United Kingdom – Restructuring and Insolvency | Tier 4

IFLR1000 2023

Lorenzo Marinuzzi Highly Regarded United States | Restructuring

Top Woman in Dealmaking Jennifer Marines

The Deal 2022

Top Woman Dealmaker Jennifer Marines

Global M&A Network 2022

Distressed/363 Sales

Named in the Top 40 of GRR 100's annual guide to the world's leading law firms for cross-border restructuring and insolvency matters.

GRR100 2022

Benjamin Butterfield Partner

Team

Pro Bono

Manhattan Legal Services We continued to work with Manhattan Legal Services on advising a tenants’ association in connection with the chapter 11 cases of a portfolio of Harlem apartment buildings. During 2022, we oversaw the implementation of a hard-fought settlement that resolved over $1 million in claims held by tenants, ended a multi-year rent strike, and led to long-overdue repairs at the buildings. Make the Road New York We, along with Make the Road New York—a non-profit legal services organization advocating on behalf of immigrant and working class communities—represented an individual in the chapter 7 bankruptcy of her former employer, to prevent the bankruptcy process from being used to discharge our client’s discrimination and harassment claims against them. Through motion practice and targeted discovery efforts, we were able to achieve a settlement of our client’s claims on favorable terms that not only will provide her with fair compensation for the harms she endured, but also with finality and closure, as well. Project Afghan Legal Assistance (Human Rights First) We have been interviewing Afghan refugees to help connect them with lawyers who can assist in their asylum (and other immigration) applications. In some cases, our attorneys have taken on the applications themselves. SCRIE/DRIE Applications (LSNYC) We assisted various clients of Legal Services NYC with SCRIE and DRIE applications to be submitted to New York City’s Department of Finance. The Department runs this program to stabilize the rents of lower-income families in the city. Mid-Atlantic Innocence Project Theresa Foudy serves as the partner supervisor for associates and summer associates who participate in screening cases for potential further investigation by the Mid-Atlantic Innocence Project. LGBT Bar Association of Greater New York Theresa Foudy supervised associates who drafted an amicus brief for the LGBT Bar Association of Greater New York (LeGaL) in connection with social impact litigation surrounding Yeshiva University's refusal to recognize an LGBTQ student group as an official University Club.

Lorenzo Marinuzzi New York Bankruptcy/Restructuring Band 3

Jennifer Marines New York Bankruptcy/Restructuring Band 4

Gary Lee New York Bankruptcy/Restructuring Band 4

Seth Kleinman Illinois Bankruptcy/Restructuring Up and Coming

Outstanding Young Restructuring Lawyer Benjamin Butterfield

Turnaround & Workouts

Theresa A. Foudy Partner

Seth J. Kleinman Partner

Gary S. Lee Partner

Jennifer L. Marines Vice Chair

Lorenzo Marinuzzi Partner

Larren M. Nashelsky Partner

James A. Newton Partner

Adam A. Lewis Senior Of Counsel

Howard Morris Senior Of Counsel

James M. Peck Senior Of Counsel

Kathleen E. Schaaf Senior Of Counsel

Raff Ferraioli Of Counsel

Amrit Khosa Of Counsel

Andrew Kissner Of Counsel

Sean Daly Associate

Martha E. Martir Associate

Miranda K. Russell Associate

Alexander G. Severance Associate

Darren Smolarski Associate

Seth Kleinman Recommended

Ben Butterfield Recommended

Awards + Rankings

Team