Sidley Secures US$640 Million Settlement for Genesis Healthcare Special Restructuring Committee Following High-Stakes Bankruptcy Litigation

On behalf of the Special Restructuring Committee of Genesis Healthcare, Inc., Sidley secured a major victory following high-stakes bankruptcy litigation concerning the transfer of hundreds of millions of dollars of debt and other payments to a company insider. Among other claims, the committee pursued claims for equitable subordination, fraudulent transfer, and preference on the basis that the insider usurped corporate opportunities from the company and concealed information from the company’s board of directors. After opening statements at trial and evidentiary hearings, the parties reached a landmark settlement under which US$150 million will be paid to the estate and approximately US$490 million in debt claims will be waived — a combined benefit to the estate of approximately $640 million.The trial and other Sidley successes in the related Chapter 11 cases have received significant media coverage, including articles in The Wall Street Journal, Bloomberg Law, and Law360.

Tom Califano is leading the restructuring team, along with Bill Curtin and Anne Wallice, supported by Chelsea McManus, Zoe Stern, and Garrett Altman. Jon Muenz led the trial team, supported by Natalie Jean and Isabel Lin.