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February 23, 2012 7:00 PM

The Bankruptcy Files: Arctic Glacier's Chill, Grubb & Ellis Seeks Sale, and Fuller Brush Fades

Posted by Brian Baxter

Catching up on what has been a busy couple of weeks for Am Law 200 bankruptcy lawyers, The Am Law Daily takes a look at several of the notable cases filed since our most recent restructuring roundup on February 10.

As usual, hourly billing rates for individual attorneys are listed in parentheses, when available.

Arctic Glacier

If you're looking for packaged ice, Arctic Glacier has got the cold stuff you need. Unfortunately, Arctic Glacier's finances have felt something of a chill lately, prompting the Winnipeg-based company to file for Chapter 15 protection in Delaware on February 22.

Bloomberg reports that Arctic Glacier, which listed both debts and assets of more than $100 million in its filing, is seeking protection from U.S. lawsuits and creditor claims while it reorganizes its operations north of the border.

Willkie Farr & Gallagher business reorganization and restructuring cochair Marc Abrams is advising Arctic Glacier in connection with the Chapter 15 case. Robert Brady, a bankruptcy partner at Delaware's Young Conaway Stargatt & Taylor, is serving as local counsel to the company. Neither firm has yet filed billing statements with the bankruptcy court.

Hugh Adams, a partner at Winnipeg firm Aikins, MacAulay & Thorvaldson, serves as Arctic Glacier's corporate secretary. The company's Web site states that Aikins and Calgary firm Shea Nerland Calnan serve as Canadian legal counsel to Arctic Glacier, while Jones Day handles some U.S. matters.

Church Street Health Management

The embattled operator of roughly 70 Small Smiles dental centers in 22 states filed for bankruptcy in Nashville on February 20, listing assets of $895.3 million against liabilities of $303.4 million, according to Bloomberg.

Several years ago, an ABC News investigation accused Small Smiles of mistreating children, something the company vehemently denied. But Small Smiles did reach an agreement with the U.S. Department of Justice in 2009 to pay $24 million over five years to settle charges that it had billed Medicaid for unnecessary dental procedures performed on low-income children, according to the Nashville Business Journal.

Bankruptcy court filings by Nashville-based Church Street Health Management, the parent company for Small Smiles, show that Waller Lansden Dortch & Davis chair John Tishler ($550 per hour), corporate partner Don Moody ($450), and restructuring partner Kathleen Stenberg ($370) are representing the company in its Chapter 11 case.

Waller Lansden partners are billing between $290 and $600 per hour, of counsel between $150 and $650, and associates between $190 and $335, according to court records, which note that the firm has represented Church Street since 2006 and is thus familiar with the company's operations.

Waller Lansden received retainer payments from Church Street Health Management totaling $400,000 between September 28, 2011, and February 17 of this year. Those payments, according to court filings, were zeroed out on February 20 when the debtor paid the firm $382,000 in fees and $18,000 in expenses. Between January 1, 2011, and February 20, 2012, Waller Lansden was paid more than $1.2 million for its work on behalf of Church Street.

Foley Hoag litigation partners Kenneth Leonetti ($589.50), James Dillon ($616.50), and Martin Pentz ($652.50), all of whom are based in Boston, have petitioned the court to serve as special litigation counsel to Church Street, according to court filings. Those filings reveal that Foley, which has agreed to shave 10 percent off its normal hourly rates for its work in the case, is billing out associates between $320 and $525 per hour.

Court records also show that Foley received nearly $110,226 in various payments between January 24 and February 17. That sum was applied against retainers totaling $204,669 paid out during the same time period. All told, Foley holds a retainer in the amount of $94,443.37 from the debtor.

According to a list of Church Street's 20 largest unsecured creditors, the company owes $310,700 to Shearman & Sterling in San Francisco. Court records show that Church Street expects to sell its Small Smiles businesses in bankruptcy.

CPAC / The Fuller Brush Company

Fuller Brush knows firsthand that the heyday of door-to-door salesmen has long since passed. 

Founded in 1906, the Great Bend, Kansas-based company--whose name once served as the title of a movie starring Red Skelton as a hapless salesmen--has sought to modernize its operations in recent years, even implementing a recent reboot to catch up with the Internet age. Those efforts failed, though, and on February 21 Fuller Brush filed for bankruptcy in Manhattan.

Herrick, Feinstein restructuring partner Andrew Gold in New York is serving as lead counsel to the company in its Chapter 11 case. The firm, which is also handling a related bankruptcy filing by Fuller Brush parent CPAC, has not yet filed billing statements with the bankruptcy court.

Private equity firm Buckingham Capital Partners bought Fuller Brush and Leicester, New York–based CPAC in 1997. Peter Goldstein serves as New York–based Buckingham's chief compliance officer and general counsel.

CyberDefender

CyberDefender, a provider of computer technical support and Internet security software, filed for bankruptcy in Delaware on February 23 under a plan to sell itself to direct product marketer Guthy-Renker, best known for its Proactiv acne treatment. Bloomberg reports that CyberDefender cited a "challenging economic climate" and an "inability to raise capital on the public market" as the reasons for its bankruptcy filing.

James O'Neill, a partner at national bankruptcy boutique Pachulski Stang Ziehl & Jones, is serving as lead counsel to Los Angeles–based CyberDefender in the Chapter 11 case. The firm has not yet filed billing statements with the bankruptcy court.

According to a list of CyberDefender's 20 largest unsecured creditors, the company owes $90,810 to Richardson & Patel in Los Angeles for legal services and $90,000 to Scott Wade and Geoffrey Lyon of Long Beach, California, for "litigation."

Gary Lloyd served as senior vice president of business and legal affairs for CyberDefender, which lists assets of nearly $8 million against debts of $42.5 million in its bankruptcy filing.

Energy Conversion Devices

Suburban Detroit-based Energy Conversion Devices (ECD) became the latest U.S. solar company to dim the lights when it filed for bankruptcy on February 14. ECD lists assets of $986.3 million against debts of $249.1 million in its Chapter 11 filing, which Reuters reports follows years of losses--the company was in the red for $306.4 million in 2011--and months of talks with bondholders.

Honigman Miller Schwartz and Cohn reorganization practice chair Robert Weiss ($650) is advising ECD in its Chapter 11 case, along with corporate partner Donald Kunz ($565), restructuring partners Judy Calton ($560) and Aaron Silver ($375), and employee benefits partner Gregory Schermerhorn ($400).

A declaration by the firm reveals that it received a $200,000 retainer on October 19, 2011, to cover fees and expenses after that date, of which $38,836.13 now remains in the retainer balance. Other Honigman partners are billing between $210 and $770 per hour and associates are ranging from $210 to $30 for their work on the case.

Covington & Burling, which represented ECD on its $420 million underwritten public offering of common stock and convertible senior notes in 2008 and on the company's acquisition of Solar Integrated Technologies in 2009, is seeking to serve as special counsel to the company in bankruptcy.

Court filings by Covington show that corporate and securities partner Andrew Jack is leading a team from the firm advising ECD. Covington has received a $100,000 retainer for its services. Partners and counsel from the firm are billing between $600 and $965 per hour, and associates between $280 and $595.

According to a list of ECD's largest unsecured creditors, the debtor owes $210,029 to French tax law firm Taj Cabinet d’avocats and an unspecified amount in "commissions" for New Jersey lawyers Richard Rathvon and Sean O'Meara of Archer & Greiner.

Jay Knoll, a former general counsel of now defunct auto parts manufacturer Collins & Aikman, serves as chief restructuring officer for ECD.

Grubb & Ellis

Commercial real estate company Grubb & Ellis filed for bankruptcy in Manhattan on February 20 as part of a plan to sell itself to New York-based BCG Partners, a brokerage business that broke away from financial services firm Cantor Fitzgerald in 2004.

Grubb & Ellis lists debts of $167 million against assets of $150 million in its Chapter 11 filing. The Santa Ana, California-based company has retained partners Frank Oswald and Scott Ratner from New York bankruptcy boutique Togut, Segal & Segal to represent it in the Chapter 11 proceedings.

A declaration by Oswald reveals that Togut was paid an $850,000 retainer to handle the Grubb & Elli bankruptcy. Partners from the firm are billing between $800 and $935 per hour and associates and counsel between $185 and $715, according to court filings.

New York's Zukerman Gore Brandeis & Crossman is serving as general corporate counsel to Grubb & Ellis in the Chapter 11 case. Court filings by the firm show that it has been paid $514,790 by the company within the past 90 days for legal services. Zukerman Gore also received a $50,000 retainer from Grubb & Ellis on February 16.

Name partner Clifford Brandeis ($625) and counsel Kyle Foley ($475) are leading the Zukerman Gore team advising Grubb & Ellis. Partners from the firm are billing between $525 and $625 per hour, of counsel between $450 and $575, and associates between $325 and $425, according to court records.

According to a list of the debtor's 50 largest unsecured creditors, Grubb & Ellis owes more than $3.7 million to lawyers from six firms: nearly $2.4 million to Jenner & Block, $368,212 to Keesal, Young & Logan, $366,138 to Munger, Tolles & Olson, $244,805 to Greenberg Traurig, $189,817 to Miller, Canfield, Paddock and Stone, and $159,252 to Parker Poe Adams & Bernstein.

Jennifer Stein is serving as general counsel for Grubb & Ellis, having taken over the role after the departure last summer of predecessor Mathieu Streiff, now a principal at commercial real estate investment firm American Healthcare Investors.

LSP Energy

Batesville, Maryland–based power plant operator LSP Energy filed for bankruptcy in Delaware on February 10, citing ongoing liquidity issues stemming from the failure to repair a key combustion turbine in Mississippi last year. The company, which lists debts and assets of between $100 million and $500 million, will pursue an asset sale in Chapter 11.

LSP has turned to a team of lawyers in Baltimore and Wilmington from Whiteford, Taylor & Preston to represent the company in its bankruptcy case. Bankruptcy practice head Paul Nussbaum ($525) and partners Martin Fletcher ($525), John Carlton ($500), Thomas Francella, Jr. ($490), and Dennis Shaffer ($460) are advising LSP at reduced hourly rates, according to court filings by the firm.

Between September 23, 2011, and February 12 of this year, LSP has paid retainers totaling $275,000 to Whiteford, of which $13,731 remains. The firm has also been paid $373,478 for prepetition services rendered to the debtor.

Wave2Wave Communications

Telephone and Internet services provider Wave2Wave Communications filed for bankruptcy in Newark on February 17, listing debts and assets in excess of $100 million. The Hackensack, New Jersey–based company has struggled to cope with mounting debt payments and adverse rulings by regulators in recent months, according to The Record of Bergen County.

Michael Sirota, co–managing partner and bankruptcy practice cochair at Cole, Schotz, Meisel, Forman & Leonard in Hackensack, and partner Warren Usatine are advising Wave2Wave in its Chapter 11 case. The mid-Atlantic regional firm has not yet filed billing statements with the bankruptcy court.

According to a list of Wave2Wave's 20 largest unsecured creditors, the company owes more than $1.1 million to five firms: $735,111 to Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, $163,531 to Glastonbury, Connecticut-based Fiondella, Milone & LaSaracina, $120,032 to Fox Rothschild, $52,431 to Irish firm Arthur Cox, and $42,452 to Blank Rome.

Michael Tenore serves as vice president of regulatory affairs and interim general counsel for Wave2Wave.

Hellas Telecommunications Luxembourg

Seeking to block U.S. creditor suits while it liquidates its assets through an administration in the United Kingdom, London-based Hellas Telecommunications Luxembourg filed for Chapter 15 protection in Manhattan on February 16.

Hellas Telecommunications is the parent company of Athens-based Wind Hellas Telecommunications, Greece's third-largest mobile phone operator. Saddled with debt from a private equity buyout and sale several years ago, Hellas Telecommunications defaulted on some of its payments in November 2009.

Wind Hellas had hired White & Case and Greek firm Karatzas & Partners to negotiate with lenders on postponing debt payments while it pursued a sale, with Bingham McCuchen representing a committee of noteholders and Allen & Overy advising lenders, according to our previous reports. Earlier this month, British telecom giant Vodafone ended its merger talks with Wind Hellas.

The company's parent has now turned to Howard Seife, global chair of the bankruptcy practice at Chadbourne & Parke in New York, to represent it in its Chapter 15 case. Chadbourne has not yet filed billing statements with the bankruptcy court.

John Verrill, a corporate restructuring and insolvency partner with Dundas & Wilson in London, is serving as English law counsel to the joint liquidators for Hellas Telecommunications. Magic Circle firm Slaughter and May advised accounting firm Ernst & Young when it took over the U.K. administration for the debtor two years ago.

 

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