Banking Services, Creditors’ Rights & Bankruptcy

Our experience in representing trustees in Chapter 7 and Chapter 11 bankruptcy cases is unsurpassed among mid-sized and large-sized firms in Western Washington. Over the last few decades, we have helped trustees fulfill their unique duties in hundreds of asset cases. It is a special area of bankruptcy practice we know well.

Representative cases we have worked on for trustees come in all shapes and sizes:

• Transtech Electric, Inc. (Western District of Washington). Liquidating substantial assets, accounts receivable and other claims. Involved substantial claims by former employees.
• Neil M. Rose (Western District of Washington). The debtor made numerous allegations of improper conduct by the trustee, many lawyers and the judge, as well as jurisdictional challenges.
• Lawrence Siegel (Western District of Washington). The case involved liquidating nearly $2 million in gold coins.
• All American Bottled Water Corporation (Western District of Washington). The case involved the “Olympic Brewery” property, a well-known property in Western Washington.
• Quality Veneer & Lumber Inc. (Western District of Washington). Sale of lumber and plywood mills.
• Gateway Center Retail LLC (Western District of Washington). Shopping center.
• Kalakala Foundation Inc. (Western District of Washington). Included the sale of the historic ferry MV Kalakala.
• Brookhaven Homes L.P. (Western District of Washington). Sales of real properties and resolution of purported secured claims.
• United Home Loans, Inc. (Western District of Washington). Liquidation of a large troubled loan portfolio.
• FD Processing Inc. dba Foremost Dairies Northwest (Western District of Washington). Liquidation of dairy bottling and production facility.
• Western Optical Corporation (Western District of Washington). Liquidation of large optical company.

Receiverships are a non-bankruptcy vehicle that puts a fiduciary in control of some (custodial receiver) or all (general receiver) of an entity’s assets. The duties of a receiver vary depending on the scope of the proceeding. A custodial receiver’s duties may be as limited as preserving a single asset pending resolution of a lawsuit, while a general receiver’s duties may be to operate and/or liquidate all assets of a business.

We have filed a number of receivership proceedings for bank and financial institution clients. Members of our Group have also served as receivers or lawyers for receivers. A few of our receivership cases include:

• Charter Bank v. Lin (Washington State Superior Court, King County). We were counsel for a bank commencing a general receivership for a dental practice.
• Banner Bank v. Pacific Homes, LLC (Washington State Superior Court, Snohomish County). We were counsel for a bank commencing a custodial receivership for a residential housing development.
• Washington Federal Savings and Loan Association v. Spanaway Heights LLC (Washington State Superior Court, Pierce County). We were counsel for a bank commencing a custodial receivership for an apartment building.
• Wells Fargo Bank, N.A. v. Kirkland Nissan Inc. et al. (Washington State Superior Court, King County). We represented the receiver in a complex automobile dealership case.
• John Yonich v. Chester Trabucco and Aberdeen Development Co., LLC (Washington State Superior Court, Grays Harbor County). We represent the receiver in the liquidation of some dilapidated real estate in connection with the resolution of a dispute between its owners.
• Xu et al. v. Xu et al. (Washington State Superior Court, King County). One of our members was the receiver in this case involving an ownership dispute over an apartment complex.
• Lindsay Moving & Rigging, Inc. (Washington State Superior Court, King County). We represented the receiver in the complete liquidation of the company.

In many Chapter 11 bankruptcy cases, an unsecured creditors’ committee is appointed. The role of the committee is to represent the interests of unsecured creditors’ as a group. The creditors’ committee has certain prescribed duties and its opinion is often influential in determining the course of a bankruptcy reorganization. The creditors committee is permitted to hire lawyers and other professionals at no cost to the individual members of the committee.

Some of the cases in which we have represented the Official Unsecured Creditors’ Committee include:

• Charles F. Berg, Inc. (Western District of Washington). A regional retailer in the women’s clothing business.
• Doelman Dairy Farms (Western District of Washington). A large dairy operation.
• Billy McHale’s Corporation (Western District of Washington). A restaurant chain.
• Equity Trusts I & II and Philip Harmon (Western District of Washington). Related cases involving serious allegations of fraud.

The bankruptcy laws grant debtors certain rights and impose responsibilities with respect to real property leases. Whether a landlord wants rent paid or wishes to remove a tenant from the property, a knowledgeable bankruptcy lawyer is a useful resource.

We have assisted landlords in maximizing their recovery and/or getting their property back in several cases including:

• Network Commerce Inc. (Western District of Washington).
• TreeSource Industries Inc. (Western District of Washington).

Special rules apply to the sale of property by bankruptcy debtors and trustees. Many “sales” are subject to higher and better offers even after a purchase and sale agreement has been executed, and may require court approval. Purchasers also need to be cognizant that representations and warranties by sellers which are common outside of bankruptcy are usually not available in a bankruptcy case. Even when given, the warranties may be of dubious value as the seller often will be gone shortly after a sale is completed.

We have assisted prospective buyers or actual buyers in the following bankruptcy cases:

• Larry’s Markets, Inc. (Western District of Washington). We represented potential buyers of a grocery store claim.
• Mini-Tankers USA, Inc. (Western District of Washington). We represented a potential buyer of the debtor’s assets.
• Metawave Communications Corporation (Western District of Washington). We represented the buyer of intellectual property.
• MOC Investment LLC (Eastern District of Washington). We represented the buyer of a service station after the initial purchase transaction failed.

In addition to representing our clients in bankruptcy cases, we have also represented them in related lawsuits (adversary proceedings) and in appeals from orders of the bankruptcy court.

Our experience in adversary proceedings includes defending creditors from dreaded preference and fraudulent transfer claims (i.e., a claim by a debtor or trustee to recover a payment the debtor made to the creditor prior to the bankruptcy case). Our appellate experience includes cases appealed to the District Court, Bankruptcy Appellate Panel and 9th Circuit Court of Appeals.

A business in financial distress needs calm, practical and experienced counsel. Hiring counsel at the first sign of trouble improves the chances of successfully restructuring a business and may avert the need for bankruptcy.

We have helped businesses work out financial problems and avoid bankruptcy. We have also represented businesses from small proprietorships to large publicly-traded companies through the complex web of Chapter 11 bankruptcy.

Some of our major Chapter 11 debtor representations include:

• Lamonts Apparel, Inc. (Western District of Washington). A Northwest-based retailer of casual apparel.
• Ernst Home Center, Inc. (Western District of Washington). A publicly-traded major regional retailer in the home improvement, hardware and garden industry. The case was one of the largest ever in the Western District of Washington and produced several published court opinions on lease issues.
• Fields Company LLC (Western District of Washington). A manufacturer of roofing products.
• Pro Air, Inc. (Western District of Washington). A passenger airline with corporate headquarters in Seattle and flight operations based out of Detroit.
• Western Cargo Distribution, Inc. (Western District of Washington). A warehousing and transportation company.
• North American Crane & Equipment Co. LLC (Western District of Washington). A company engaged in the design, manufacture and service of cranes, primarily for the marine industry.
• Penmar Marine Co. (Western District of Washington). A marine business including yacht charters, harbor services, boat storage, boat and motor sales, services and repairs, and paint and fiberglass services.
• Galaxy Sports Corp. (Western District of Washington). A licensee of soccer products.
• Gruntruck (Western District of Washington). Allowed a music band to avoid an onerous recording contract.