Bankruptcy Litigation

Sidley’s bankruptcy and distressed debt litigation lawyers have represented clients in some of the most sophisticated and complex bankruptcy matters across the United States, playing a significant role in important cases over the last decade. We leverage a deep bench of litigators experienced across the full spectrum of bankruptcy and restructuring matters, together with lawyers from our global industry and practice teams, including energy, financial services, hospitality, healthcare, life sciences, media and entertainment, real estate, and REIT, to deliver integrated solutions to complex challenges. This collaborative approach provides uncommon value to clients facing sensitive, high-profile matters.

Our distressed debt litigation team regularly represents lenders on a wide variety of workout litigation, including representing lenders in collections actions (such as NY CPLR § 3212 actions seeking judgments in lieu of complaint, collection actions against borrowers and guarantors, and other related matters), real estate and Article 9 U.C.C. foreclosures on equity pledges, and representing lenders in virtually all aspects of lender liability matters (including, for example, tort claims, alleged breaches of credit agreements, fiduciary duty, and voidable transfer actions). Moreover, our litigators regularly work closely with our finance and banking transactional partners to provide litigation advisory work and support for out-of-court loan modifications and recapitalization efforts.

Harnessing this talent and industry experience, we provide seamless advice and a nuanced strategic perspective to large debtors, industry creditors, banks, hedge funds, agents and trustees, and private equity firms, among other types of clients. From litigating adversary proceedings and contested asset sales to plan confirmations, appeals, and strategic restructuring advice, Sidley’s bankruptcy litigators have a record of success, often in highly timesensitive matters.

Tier 1 Nationwide Ranking in Bankruptcy
Benchmark Litigation 2026

A Multidisciplinary Approach

Our work spans the scope of bankruptcy litigation matters, including:

• Contested DIP credit facilities
• Civil and criminal actions concurrent with Chapter 11 filings, including mass tort liabilities, shareholder litigation, and fiduciary duty claims
• Complex transaction-related litigation, including difficult affiliate and insider issues in adversary proceedings throughout the country
• Overcoming oppositions to acquiring assets subject to Section 363 free and clear of claims
• Proofs of claims in bankruptcy court against debtors
• Administration of large-scale alternate dispute resolution processes
• Contested plans of reorganization

Ranked Among Top Firms for Litigation: General Commercial
Chambers USA 2026: California, Dallas/Fort Worth, Illinois, New York, and Washington, D.C.

A small sampling of our more recent bankruptcy litigation experience includes representing:

Debtor Representation

• An oil and gas E&P company in connection with various contested matters, including the approval of DIP and exit facility, disclosure statement, and confirmation.
• A consumer products company in connection with its pre-packaged bankruptcy filing in the United States Bankruptcy Court for the District of Delaware, which was completed in two months.
• A manufacturing company which closed its former lead acid battery plant, winning the appeal in a favorable opinion from the bankruptcy court to the U.S. District Court for the District of Delaware.
• An auto financing company in connection with its Chapter 11 bankruptcy cases, including fraud claims against former minority shareholders and officers.
• A manufacturing company in connection with its pre-negotiated bankruptcy filing regarding asbestos liabilities, including defeating challenge from U.S. Trustee.
• A private healthcare company across numerous litigated matters, including, among others, contested assumption motions, defense of WARN act class action, various disputes with secured lender, adversary actions with pre-petition service providers, contempt litigation regarding stay violations, and appellee briefing with respect to successful outcomes before the bankruptcy court.
• A national food distributor in multiple matters, including an adversary action against a large public company, where our client successfully opposed motions for abstention, venue transfer, and withdrawal of the reference, and an adversary action against a litigation funder that resulted in successful dismissal of all claims.
• A biopharmaceutical company in a lender adversary action, estimation motion practice, UCC discovery, and a successful contested confirmation hearing.
• A healthcare company in multiple matters, including support of an independent director’s claim investigation and contested confirmation hearing.
• Legacy Reserves, a publicly traded oil and gas exploration and production company, in the restructuring of its US$1.4 billion of funded debt in the U.S. Bankruptcy Court for the Southern District of Texas.
• Merit Street Media, Inc. (“Merit Street”), a Texas-based television and digital media company, in its Chapter 11 filing in the United States Bankruptcy Court for the Northern District of Texas.
• Conn’s Inc., an iconic American furniture and appliance retailer with over US$1.1 billion of total funded debt listed in the filing, in its Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.
• American Entertainment Properties Corp. (“AEP”), an Icahn Enterprises, L.P. subsidiary, in connection with the chapter11 cases of IEH Auto Parts Holding, LLC and its debtor subsidiaries (collectively, “Auto Plus”). AEP, Auto Plus, and the Official Committee of Unsecured Creditors in Auto Plus’ pending chapter 11 cases reached a settlement on April 20, 2023 that resolves numerous claims against AEP in its capacities as prepetition and debtor-in-possession lender to Auto Plus, as well as against Pep Boys and other Icahn-owned entities, and creates a path for the confirmation of a chapter 11 plan in Auto Plus’ Chapter 11 cases.
  
  Also representing AEP in connection with its potential credit bid for some or all of the assets of Auto Plus pursuant to Section 363 of the Bankruptcy Code.
• AppHarvest, Inc., a high-tech indoor farming company with over US$300 million in funded debt and lease obligations, successfully leading the Chapter 11 cases and culminating with the confirmation of its Chapter 11 plan in the Bankruptcy Court for the Southern District of Texas on September 14, 2023.
  
  AppHarvest’s Chapter 11 cases were completed in less than 60 days and resulted in the orderly sale of the company’s assets, including its four state-of-the-art greenhouse farm facilities, as well as broad releases for its directors and officers.

Creditor Representation

• A lender to a global food supplier and several of its affiliates in Chapter 11 and Chapter 15 cases. The supplier was one of the largest fishing companies in the world. Our client was part of a senior lender group prosecuting a motion for appointment of a Chapter 11 trustee over the debtors based on fraud by the owners of the debtors, as well as the creditors’ loss of trust in management.
• A secured and DIP lender to a major oil and gas company in connection with various contested matters, including the approval of DIP and exit facility and confirmation.
• A Committee of Unsecured Creditors of a dairy processor and distributor in connection with various issues, including a disputed key employee incentive plan and key employee retention plan.
• A statutory committee of unsecured creditors in an investment management firm’s Chapter 11 bankruptcy case. Our client sought Chapter 11 protection in Delaware ahead of a Chancery Court hearing on summary judgment approval of a US$189 million arbitration award won by investors in one of the firm’s funds after a multiyear battle. Although the firm has some US$2.5 billion in assets under management, our efforts were instrumental in moving the venue of the bankruptcy case from Delaware to Dallas and in installing an independent board that was hand-selected by the committee to administer the Chapter 11 case.
• A secured creditor in a dispute regarding liquidation preference.
• Axonic Capital, a New York City-based alternative investment advisor, as a significant secured creditor in the Chapter 11 bankruptcy of Saks Fifth Avenue.
• A leading alternative asset management firm as DIP Lender and stalking horse bidder in connection with the Chapter 11 cases of a developer and operator of solar and energy storage projects in the United States (the debtor).

Directors and Officers (D&O) Representations

• Former independent directors of public media company in lawsuit brought by bankruptcy trustee seeking more than US$300 million based on allegations of breaches of fiduciary duty related to acquisition and to oversight of financial reporting controls.
• Former officers of public manufacturing company against breach of fiduciary duty claims by bankruptcy trustee.
• Sponsor-designated directors of healthcare company against breach of fiduciary duty claims by creditors’ committee.
• Former officers of public company in shareholder securities fraud litigation, in connection with talc bankruptcy proceedings.
• Directors and officers on fiduciary duty risk mitigation, and D&O insurance matters.

Other Representations

• An investment firm in an action brought by the Madoff Securities Investor Protection Act (SIPA) trustee to recover funds allegedly received by our client from a feeder fund, which in turn had invested in Madoff’s fund in a fraudulent transfer adversary proceeding that is ongoing after multiple pre-answer motions to dismiss on various grounds.
• A former parent of an energy company and several of parent’s current subsidiaries in action brought by liquidating trustee of the energy company. The trustee alleged fraudulent transfer and alter ego claims, in which the trustee sought to hold our client and its former parent liable for all of the company’s debts, including potentially US$14 billion in environmental claims. Sidley lawyers successfully argued the summary judgment motion that resulted in the Court dismissing most of the Trustee’s damages, leading to a successful and comprehensive settlement.
• An investment management company in affirming a trial victory in the U.S. Court of Appeals for the 3rd Circuit in a precedential opinion. The Chapter 7 trustee for the debtor alleged that our client improperly valued and liquidated securities that were subject to repurchase agreements and sought approximately US$200 million in damages.
• Several banking clients, one of which acted as an agent and faced a contested debtor-in-possession (DIP) and exit facility application, and another that was an asset-based lending (ABL) agent in connection with various matters, including a contested valuation dispute regarding the sale of assets.
• A natural gas pipeline in an action brought by the company against an oil and gas distributor that involves the interplay between the bankruptcy code and FERC regime with respect to the rejection in bankruptcy of a transportation services agreement.
• A private equity sponsor in a dispute with portfolio company management team resulting from management’s unauthorized bankruptcy filing.
• A private equity sponsor against creditor committee claims related to refinancing transactions.
• A creditor forcibly removed as manager of debtor’s luxury hotel chain prevailed in estimation process after both a bankruptcy court trial and related arbitration, rejecting debtor’s attempts to limit our client’s damages. Sidley obtained a multi-million dollar award notwithstanding liquidated damages provision and Covid-19 related defenses asserted by debtor.
• A lender in obtaining rights to its secured collateral and obtaining recovery on the collateral after the collateral was auctioned. Sidley filed objections to debtors use of cash collateral and a lift stay motion which ultimately drove a negotiated resolution allowing debtor to achieve its primary goal of recovering and monetizing its collateral.
• A lender in New York State CPLR § 3213 actions to recover on guarantee that resulted in borrower repaying 100% of outstanding debt owed on defaulted loan.
• A lender in largest judicial foreclosure in New York City last year of an outdoor retail mall and hotel space on Staten Island, as well as collateral litigation emanating from the foreclosure process.
• A CMBS service and investors in recovering on Article 9 equity pledges over SPVs with multi-state real estate holdings.
• Lenders in an uptier restructuring transaction analysis and other potential intercreditor disputes advising with respect to litigation risks and strategies concerning same.
• A payment card issuer in putative class action brought by Chapter 7 debtor regarding credit reporting and statutory bankruptcy discharge injunction. Dismissal of nationwide class allegations by the Second Circuit was recognized by The American Lawyer in its Litigator of the Week feature.
• An investment firm with competing DIP proposal, in cross examination of debtor financial advisory at DIP hearing, and in negotiation of a resolution allowing the client to participate in DIP economics.
• A software company in Rule 2004 discovery.
• The CFO of a fitness equipment manufacturer at a bid procedures hearing.
• The special restructuring committee of a healthcare company against a secured lender for equitable subordination, fraud transfer, and other claims.
• A restaurant chain as a lender against fraudulent transfer claims.
• REIT board members with respect to issues arising out of an Israeli restructuring proceeding, including potential claims against lender, REIT board, and equity.
• A multi-national investment bank, as administrative agent, in an asset-based loan facility for BJ Services, LLC both pre-Chapter 11 and in the Chapter 11 bankruptcy cases of BJ Services, LLC and certain of its affiliates.
  
  BJ Services experienced significant deterioration in its business in Q1 and Q2 2020 as the combination of the oil price collapse and COVID-19 caused customer demand to plummet. That led to a substantial drop in availability under its ABL credit facility and an extended period of negotiations with our client and the ABL lender syndicate regarding out-of-court and in-court restructuring. The company’s complex capital structure (with a secured first out/last out term loan facility secured by machinery and equipment and a separate secured real estate facility) created an unusually difficult dynamic, and ultimately the parties were not able to agree on a “going concern” restructuring path. As a result, BJ Services filed for bankruptcy in July 2020; we have continued to represent our client in what has turned out to be a very difficult bankruptcy, where numerous issues have arisen regarding the company’s use of the ABL lenders’ cash collateral and allocation of collateral proceeds.
• An American full-service bank as one of the largest creditors in the bankruptcy of Chesapeake Energy.
• The Official Committee of Unsecured Creditors of Borden Dairy Company in Borden’s voluntary reorganization under Chapter 11.