Practice

Bankruptcy Litigation

Trial-Ready Counsel for Bankruptcy Disputes

Sheppard’s Bankruptcy Litigation team consistently represents clients in the highest stakes adversary proceedings and contested matters nationwide.   

Possessing a unique combination of extensive trial experience and deep restructuring knowledge, we protect client interests with our distinctive brand of courtroom skill and commercial pragmatism.

Trial-Ready Counsel for Bankruptcy Disputes

Sheppard’s Bankruptcy Litigation team is trusted to handle the most complex and sensitive disputes that arise in contested insolvency proceedings.

We regularly appear in bankruptcy courts across the country, representing clients in adversary proceedings, contested plan confirmations, motions for relief from stay, fraudulent transfer and preference actions, cash collateral disputes and appeals. 

Clients value our ability to pair trial experience with restructuring know-how. As actual trial lawyers, not just litigators, our Bankruptcy Litigation team members craft strategies to win cases in bankruptcy court. They handle all aspects of the proceedings, from preparing witnesses to leading evidentiary hearings, trying cases and handling appeals. We also advise on non-judicial foreclosures, guarantor litigation and distressed loan enforcement issues, ensuring continuity from out-of-court workouts to courtroom advocacy. In Texas, we are known for fast, efficient commercial foreclosures; in New York, clients trust our familiarity with the Commercial Division and Southern District judges to help shape a successful strategy; in California, our clients come to us when their largest legal matters are pending before the bankruptcy court. 

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Experience

Representative Matters

Published Decisions

Sheppard’s Bankruptcy Litigation Team has played a leading role in many of the cases that govern today’s bankruptcy court litigation process, including the following:

  • Bobka v. Toyota Motor Credit Corporation, 968 F. 3d 946 (9th Cir. 2020). The first ever circuit court of appeal decision addressing the interplay between Sections 365 and 524, confirming that a debtor’s lease assumption under Section 365 survives discharge and binds the debtor notwithstanding the debtor’s failure to separately reaffirm that obligation under Bankruptcy Code section 524.
  • In re Exide Techs., 601 B.R. 271 (Bankr. D. Del. 2019). Important decision establishing limits on the power of government entities, holding that claims asserted by an Air Quality Management District are subject to discharge and that non-compensatory environmental penalties imposed by the government were not entitled to administrative expense priority.
  • In re Berkeley Delaware Court, LLC, 834 F.3d 1036 (9th Cir. 2016). Critical decision from the circuit court of appeal establishing that a settlement can be effectuated through a trustee’s sale of estate claims against to the potential litigation target, so long as that sale complies with the dictates of Bankruptcy Code section 363.
  • Arriva Pharm., Inc. v. Lezdey (In re Arriva Pharm., Inc.), 456 B.R. 419 (Bankr. N.D. Cal. 2011). Case establishing the supremacy of a plan confirmation order that included assumption of pharmaceutical patent license, over the objections of licensor who sought to terminate the license.
  • FDIC v. Kipperman (In re Commer. Money Ctr., Inc.), 392 B.R. 814 (B.A.P. 9th Cir. 2008). Important decision testing the parameters of true leases, as opposed to disguised loan transactions, holding that lease payments are “payment intangibles” rather than “chattle paper,” allowing funds to be recovered into the bankruptcy estate.
  • In re Dunmore Homes, Inc., 380 B.R. 663 (Bankr. S.D.N.Y. 2008). Important venue decision confirming that even when a debtor chooses an eligible venue under Bankruptcy Code section 1408, the bankruptcy court can still transfer that matter (in this case, from the Southern District of New York to the Eastern District of California) based upon the interests of justice and creditor convenience.
  • Schoenmann v. BCCI Constr. Co. (In re Northpoint Communs. Grp., Inc.), 361 B.R. 149 (Bankr. N.D. Cal. 2007). Decision imposing limitations on a trustee’s ability to recover from third parties based upon fraudulent transfer and preference theories of liability.
  • Arris Int'l, Inc. v. Hybrid Patents, Inc. (In re Com21, Inc.), 357 B.R. 802 (Bankr. N.D. Cal. 2006). Significant decision governing the venue issues in adversary proceedings, holding that a Northern California bankruptcy case could not provide the basis for transferring already pending patent litigation in the Eastern District of Texas.
  • In re W. Asbestos Co., 313 B.R. 456 (Bankr. N.D. Cal. 2004). Decision confirming the propriety of a “pot plan” of reorganization, pursuant to which a trust was created that would both assume all liabilities of the debtor and pursue legal actions against insurers, allowing all holders of asbestos claims to be treated in substantially equivalent manners, as required under Bankruptcy Code section 524(g).

Representative Matters

  • Represented CalPERS Corporate Partners LLC in defense of alleged fraudulent conveyance claims in adversary proceeding, involving standing, and Bankruptcy Code and Maine Fraudulent Conveyance laws
  • Represented World Rugby Limited in contested debtor-in-possession financing under Section 364 and plan confirmation
  • Represented board members to defend alleged breach of fiduciary claims for over $46 million in adversary proceeding involving standing and Delaware governance law issues
  • Represented board in Chapter 11 proceeding seeking over $180 million in an alleged breach of fiduciary duty action
  • Represented the Catholic Diocese of Orange in the successful, contested acquisition of the Crystal Cathedral site and 30 acre campus from the Chapter 11 estate of the Crystal Cathedral Ministries, which also entailed claims estimation/objection litigation
  • Represented seven different financial institutions in connection with fraudulent conveyance claims filed by the litigation trustee in Lehman Brothers bankruptcy case
  • Represented existing lender in successful, heavily contested litigation concerning “new value” equity acquisition of Chapter 11 reorganized multi-family real estate debtors which owned several large apartment complexes in four states. The court-approved acquisition by the secured lender-related entity occurred over the objection of the old equity holders
  • Represented equipment lessor in Chapter 11 proceedings of office supply store chain, including successful trial result concerning “true lease” treatment of the agreements concerning the extensive equipment involved
  • Represented agent bank on loan workout, extensive land use issues, enforcement of creditor’s rights, and lien and guarantor litigation concerning a series of syndicated and participated loans made to a large national official shopping mall developer concerning projects in California, Texas and Arizona
  • Represented Tanon Manufacturing, a Chapter 11 manufacturing debtor and continued to represent the post plan estate administrator regarding pursuit of litigation claims
  • Represented agent bank in Chapter 11 proceedings and related state court litigation concerning construction of large ski resort hotel/condo project
  • Represented Northwest Farm Credit Services in obtaining the denial of debtors’ discharge for fraudulent conduct—the Bankruptcy Court ruling was affirmed on appeal
  • Represented First National Bank in defense of a multi-million-dollar preference action that challenged an Employee Stock Ownership Plan financing. The matter settled after the bank obtained partial summary judgment
  • Represented the bankruptcy trustees in class litigation in many types of cases, including a shopping center developer, an investment company/mezzanine lender, a large trucking company and two low/moderate income housing projects
  • Represented a pension and profit-sharing plan in a bankruptcy case that successfully resulted in a seminal Ninth Circuit decision holding that the automatic stay stays all appeals in proceedings originally brought against the debtor, regardless of whether the debtor is the appellant or appellee
  • Represented the court appointed receiver for a large golf course and residential development in Rancho Santa Fe, California involving three separate lawsuits over the sale of the property and an involuntary bankruptcy filing—the matter spanned six years until the successful discharge of the receiver
  • Represented secured lender in bankruptcy court litigation concerning historic mixed use office building and successful pursuit of guarantor for full deficiency
  • Represented large Medicare receivables-based lender in Chapter 11 litigation against large medical services provider regarding alleged overpayment issues
  • Represented (pro bono) an immigrant married couple that could not speak English in defeating a foreclosure action brought by a predatory lender who sought to sell their home
  • Represented (pro bono) an immigrant married couple when they were sued by a credit card company seeking to collect on discharged debt
  • Represented a regional bank sued by a Chapter 11 debtor for violation of the automatic stay
  • Represented the alleged debtor (a sporting goods company) in defeating an involuntary Chapter 7 petition
  • Represented large golf equipment manufacturer in nondischargeability action brought against a debtor who produced and sold counterfeit products
  • Represented the Schools & Education Subcommittee (recovering approximately $1 billion in claims) as a member of the Orange County Pool Participant Committee in the Chapter 9 bankruptcy case of Orange County. Also served as special litigation counsel for the Pool Committee and litigation co-counsel to the County in various related litigation matters, resulting in over $800 million in recoveries.
Clients
  • Aetna
  • Bank of America
  • Catholic Diocese of Orange
  • CIT
  • Comerica Bank
  • Convergent Capital
  • First Bank & Trust Company
  • Fry’s Electronics
  • GE Capital Commercial Aviation Services
  • GWF Power
  • MUFG Union Bank
  • Orange County Department of Education
  • Pacific Premier Bank
  • Prudential Insurance
  • Prospect Mortgage Company
  • Silicon Valley Bank
  • Tanon Manufacturing
  • Toyota Motor Credit Corporation
  • U.S. Bank
  • Wells Fargo Bank