On June 17, 2008, Judge Lawrence McKenna of the U.S. District Court of the Southern District of New York dismissed all claims asserted against 430 lending institutions represented by Kirkland & Ellis LLP in the case Adelphia Recovery Trust v. Bank of America et. al. The dismissed claims, which sought more than $4.5 billion dollars of recovery, include actions for fraudulent transfers, preferences, equitable subordination and equitable disallowance.
"On behalf of our clients, we are very pleased with this result," said Richard Wynne, Kirkland partner and leader of the Kirkland team that represented the non-agent lenders.
Kirkland has represented the non-agent lender group since 2003, shortly after the action was filed by the creditors' committee against all lenders who had participated in any of six Adelphia prepetition credit agreements by purchasing Adelphia secured debt. In the Adelphia bankruptcy case, all lenders were paid in full with interest, subject to the claims in this lawsuit.
The creditors' committee sued both those lenders who had acted as agents, known as the "agent lenders," under each credit facility for tort and bankruptcy claims, as well as lenders who had purchased the debt, known as the "non-agent lenders," at any time in any of the credit facilities, for only the bankruptcy claims. Kirkland represented the majority of the non-agent lenders named in the case.
The non-agent lenders filed their motions to dismiss the bankruptcy claims on December 21, 2007. Judge McKenna heard oral argument on June 4, 2008, and issued his decision on June 17.
The non-agent lender group was represented by partners Richard Wynne, Melissa Ingalls, Bennett Spiegel, Erin Brady, Laura Thomas and Becca Wahlquist, and associates Elizabeth Kim, Tammy Tsoumas, Esther H. Kim and Derek Milosavljevic. Additional support was provided by Susan Perry, Terry Ellis and Lorena Toro.
Kirkland & Ellis LLP is a 1,400-attorney law firm representing global clients in complex restructuring, litigation, dispute resolution/arbitration, corporate, tax, intellectual property and technology matters. The Firm has offices in Los Angeles, Chicago, Hong Kong, London, Munich, New York, San Francisco and Washington, D.C.