The Work

August 26, 2010 6:24 PM

The Bankruptcy Files: Party Supplies, Marine Services, and Retail Banking

Posted by Brian Baxter

While consumers have continued flocking to bankruptcy court in order to seek protection from creditors, the number of business bankruptcy filings fell 17 percent during the first six months of this year when compared to the first half of 2009, according to a recent report by The Wall Street Journal and data released last week by the Administrative Office of the U.S. Courts.

The drop isn't limited to the U.S. A recent report in the U.K. found that the number of companies filing for bankruptcy in the second quarter of 2010 decreased by almost 20 percent compared to the same period in 2009.

Corporate bankruptcies also fell in Spain, which has been hit hard during the economic downturn, and Japan has experienced a similar drop-off in business insolvency filings. A recent increase in German corporate bankruptcies seems to be a blip amidst a return to economic growth in the country. All this means more competition between restructuring lawyers at international firms for fewer overall filings.

Things must really be looking up! Not so fast. Reuters reports that world stocks are coming off seven-week lows and that a string of poor economic indicators have financial markets in the U.S. and elsewhere awaiting a speech by Federal Reserve chairman Ben Bernanke on Friday.

Here at The Am Law Daily, we know that "The Bankruptcy Files" won't be going away anytime soon. Some of the latest noteworthy filings that have crossed our radar:


Novelty and party supplies retailer Oriental Trading Company and four of its affiliates filed for bankruptcy in Delaware on August 25 in order to restructure nearly $757 million in debt, Bloomberg reports. The company is one of the largest merchants for arts and crafts, toys, and other small items at value prices, according to The Associated Press, which notes that Oriental has obtained $40 million in debtor-in-possession financing to fund operating expenses during its restructuring.

Richard Hahn, cochair of the bankruptcy and restructuring group at Debevoise & Plimpton, is representing Oriental along with bankruptcy partner My Chi To and litigation partner Michael Wiles. The firm has not yet filed billing statements with the bankruptcy court.

Debevoise has a longtime relationship with private equity firm The Carlyle Group, which owns a majority stake in Omaha-based Oriental. Also advising the debtor is bankruptcy partner Joel Waite from Delaware's Young Conaway Stargatt & Taylor.

Simpson Thacher & Bartlett litigation partner Thomas Rice is representing JPMorgan Chase, agent bank for first-lien creditors, while Kramer Levin Naftalis & Frankel bankruptcy partner Robert Schmidt is advising Wilmington Trust, agent bank for second-lien creditors.


A leading provider of undersea and marine support vessels and equipment for the oil and gas industry, Trico Marine Services has fallen on hard times. Bloomberg reports that the sluggish economy forced The Woodlands, Texas-based company into bankruptcy in Delaware on August 25.

Vinson & Elkins bankruptcy partners John Mitchell and Steven Abramowitz are representing Trico in its Chapter 11 case. Robert Dehney, head of the business reorganization and restructuring practice at Delaware's Morris, Nichols, Arsht & Tunnell, is serving as local debtor's counsel. Cahill Gordon & Reindel is serving as special counsel to the company. None of the three firms have yet submitted billing statements with the bankruptcy court.

According to a list of Trico's 40 largest unsecured creditors, the company owes nearly $75,000 to three law firms. Winston & Strawn is listed as being owed $46,798, Indian firm Amarchand & Mangaldas another $17,200, and Jones, Walker, Waechter, Poitevent, Carrère & Denègre $10,213. All of the outstanding claims are listed as "trade debt" in court records.


Two bank holdings companies in the Chicagoland area filed for bankruptcy last week after being closed by regulators.

After being monitored by the FDIC for several months, in May, regulators finally shut down Elmwood Park, Ill.-based Midwest Bank & Trust. On August 20, Bloomberg reports that Midwest Bank's publicly traded parent company, Midwest Banc Holdings, filed for bankruptcy in Chicago.

Hinshaw & Culbertson bankruptcy partner William Connelly in Chicago is serving as lead debtor's counsel to Melrose Park, Ill.-based Midwest Banc. The firm has yet to file billing statements with the bankruptcy court.

Also entering Chapter 11 protection on August 20 was Amcore Financial. The U.S. Office of the Comptroller of the Currency seized the bank holding company's chief operating subsidiary, Amcore Bank, in April, and sold its deposits to Harris Bank. Amcore Financial will now liquidate the rest of its remaining assets in bankruptcy court, according to Reuters.

Advising Amcore Financial is Skadden, Arps, Slate, Meagher & Flom business reorganization partner George Panagakis, a former Am Law Daily Dealmaker of the Week for his work helping suit maker Hartmarx sell itself out of bankruptcy. According to Skadden's application for employment filed with the bankruptcy court, the firm has received a retainer of $250,000 from Amcore Financial.

Skadden estimates its legal costs at $350,000 for the Chapter 11 case. Skadden partners are billing between $775 and $1,050 per hour, counsel between $735 and $835, and associates at hourly rates ranging from $360 to $680.

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