DALLAS, TEXAS – – DEC. 21, 2011
Wick Phillips, a full-service business law firm, achieved a strategic victory in the defense of a large, U.S.-based emergency vehicle manufacturer, when Judge Brendan Shannon disallowed an $8 million claim on Nov. 2, 2011.
The case involved a post-confirmation dispute over an agreed order regarding the assumption of the lease for the Debtor’s headquarters and one of the company’s main manufacturing facilities. The dispute centered on the completion dates of certain construction projects as stipulated in the reorganization plan. The challenging creditor argued that the Debtor’s failure to meet an alleged construction deadline entitled it to an $8 million allowed claim under the Agreed Order.
After a two-day trial, United States Bankruptcy Judge Brendan Shannon concluded that the agreed order established that Oct. 31, 2008 was the material deadline under the terms of the cure provision, and not an earlier deadline as asserted by the challenging creditor. The Debtor’s completion of construction as required under the terms of the agreement, combined with issuance of a valid certificate of occupancy on Sept. 29, 2008, a full month before the October deadline, among other facts, supported the judge’s ruling.
.
“This ruling was critical to moving the defendant’s bankruptcy proceedings closer to final resolution, and significantly benefitted both the company and its creditors by resolving a large potential liability,” said David Drez, lead trial counsel for the Debtor and partner with .
In his order, Judge Shannon disallowed the claim in its entirety, ruling that the Debtor had not materially breached the Agreed Order. The Court also denied the challenging creditor’s motion for summary judgment. Resolution of the case was an important step in allowing the Debtor to seek closure of its Chapter 11 case that has been pending since 2008.
The Debtor was represented at trial by David Drez of , Abi Ottmers and Ian Peck of Haynes and Boone, LLP, and Chris Ward and Justin Edelson of Polsinelli Shugart PC.
About Wick Phillips: Serving the legal needs of businesses in a broad range of industries, practices law with purpose. Specialty areas include commercial litigation, bankruptcy, creditor’s rights, civil appeals, corporate, corporate advisory, labor and employment, and securities. For more information visit www.wickphillips.com.
