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Bankruptcy & Restructuring

The Brattle Group combines industry expertise with financial, economic, and statistical analyses to advise debtors, creditors, courts, examiners, and governments on major restructurings and liquidations.

Brattle’s experts have testified in, or consulted on, many of the largest and most complex bankruptcies, including Caesars, U.S. Steel Canada, Lehman Brothers, Washington Mutual, Nortel Networks, Enron, Tribune, and Refco. Brattle analyses have been relied upon for determinations of plan confirmation, fraudulent conveyance, substantive consolidation, and monetary damages.

Our Focus

  • Business Enterprise and Securities Valuation
  • Credit and Solvency Analysis
  • Equity versus Debt Distinction
  • Claims Estimation
  • Forensic Accounting
CASE HIGHLIGHT

Testimony of Brattle Principal Yvette Austin Smith Contributes to Win for United States Steel Corporation in Debt/Equity Classification of Intercompany Debt

CASE HIGHLIGHT
Brattle advises Apollo Global Management and submits expert declaration on valuation and solvency in connection with CEOC plan confirmation.

Engagements
REPRESENTATIVE ENGAGEMENTS

Below is a list of representative engagements for our Bankruptcy & Restructuring practice.

Caesars Entertainment Operating Company
The Brattle Group was retained by Apollo Global Management to provide retrospective valuation and solvency analyses. The analysis encompassed approximately 15 transactions that occurred between 2008 and 2014, prior to CEOC filing for bankruptcy in January 2015. The transactions involved the sale of gaming and lodging properties, intellectual property, and other related assets. The Brattle Group also valued contributions to the restructuring plan.
U.S. Steel Canada
In connection with a proposed plan of arrangement, Brattle conducted a financial and economic analysis of whether approximately $2 billion loaned by United States Steel Corporation to a wholly-owned subsidiary should be recharacterized as equity. Subsequent to the loan transactions, the subsidiary, U.S. Steel Canada, was granted protection from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act.
Lehman Brothers
A current Brattle principal was retained as a testifying expert on the liquidity and solvency of Lehman’s U.S. and UK broker-dealer entities. Brattle analyzed whether a certain series of transactions hastened the insolvency of Lehman Brothers Holdings, Inc., and valued collateral securing short-term loans for the purpose of determining the ability to repay in a manner consistent with contractual terms and standard industry practice.
Washington Mutual
A current Brattle principal was retained as a consulting expert in connection with litigation arising from the purchase of Washington Mutual by JPMorgan Chase. Brattle conducted a retrospective solvency analysis of the bank and the holding company during the period surrounding the FDIC and OCC facilitated sale of the bank. We provided a financial comparison of “insolvency,” as defined under the U.S. Bankruptcy Code, to “unsafe and unsound condition,” as defined by the FDIC.
Nortel Networks
The Brattle Group was retained by counsel for the UK Pension claimants to opine on allocation and claims issues in Nortel’s bankruptcy proceedings. Brattle experts sponsored and supported two testifying experts in recently-concluded trials. In the allocation trial, occurring simultaneously before both the Delaware Court of Bankruptcy in the U.S. and the Superior Court of Toronto in Canada, Brattle recommended a pro rata allocation of Nortel’s liquidation proceeds. In May 2015, the two Courts adopted a modified pro rata allocation mechanism.
SemGroup
A Brattle principal was retained by SemGroup’s bankruptcy trustee as a damages expert in litigation brought against the firm’s auditors. Brattle modeled the SemGroup founder’s speculative oil and gas derivatives trading business, and evaluated the damages caused by the audit firm’s alleged breach of fiduciary duty in failing to issue a qualified opinion on the SemGroup financial statements given its knowledge of the trading activity. The case was settled.
Tribune
During Tribune’s bankruptcy proceeding, Brattle advised counsel for a major creditor group on potential fraudulent conveyance claims against several large Wall Street banks over their financing of Tribune’s two-stage leveraged buyout. Brattle reviewed the solvency opinions issued by a third-party firm, its due diligence effort, and conducted independent balance sheet and cash flow solvency tests.
Refco
In several suits against Ernst & Young brought by Refco’s litigation trustee, Brattle was retained by E&Y’s counsel to defend against allegations of breach of fiduciary duty over E&Y’s role as the tax preparer. Brattle performed forensic analysis of the tax returns and the audited financial statements of various Refco entities, and analyzed whether the alleged breach of fiduciary duty could have delayed a more timely disclosure of Refco insiders’ wrongdoings, and ultimately contributed to the brokerage’s demise. The case was dismissed.
Parmalat
Brattle was retained by counsel for Bank of America regarding several financing transactions it arranged for Parmalat’s Latin American subsidiaries. Brattle testifying experts explained the commercial and tax purposes for features of syndicated loans and IPOs in emerging markets, analyzed their impact on Parmalat’s overall indebtedness, estimated a key Brazilian obligor’s enterprise value, and rebutted the deepening insolvency theory of damages.
Mirant
In litigation arising out of the Mirant bankruptcy, Brattle was a consulting expert to the official unsecured creditors’ committee in an attempt to recover allegedly fraudulent conveyances made by Mirant to Southern Company just prior to a spin-off of Mirant from Southern. The committee alleged that Southern knowingly spun-off an effectively insolvent company and further contributed to the insolvency of Mirant by improperly stripping the company of valuable assets.
Enron
On behalf of Deutsche Bank, Brattle analyzed Enron’s special purpose vehicle transactions, the associated off-balance-sheet debt, Enron’s securities disclosure, and stock and bond valuation. In the adversary proceedings, Brattle sponsored two testifying experts to opine on the accounting of certain transactions involving Deutsche Bank, and analyzed the transactions’ impact on Enron’s key financial ratios and their potential contribution to Enron’s credit downgrade and ultimate bankruptcy. The case was settled before trial in Deutsche Bank’s favor.
Global Crossing
On behalf of the Board of Directors for Global Crossing, Brattle reviewed the business purposes of the company’s fiber optic capacity lease transactions, conducted forensic analysis of the associated accounting records, and reviewed SEC disclosure regarding Global Crossing’s pro forma accounting. Brattle also examined the market reaction to the company’s various disclosures.
Big Rivers
Brattle served as a financial advisor to Big River Electric Corporation, resulting in a successful restructuring that included the refinancing of more than $500 million in debt, significant savings in debt service expense, and a regulatory-approved rate increase.
Experts
Publications
Brochure
Expertise in Coal Bankruptcy
February 2016
Published by The Brattle Group, Inc.
Article
The Implications of Transfer Pricing in Bankruptcy
May 29, 2015
Bin Zhou and Steven D. Felgran
Published in Bloomberg BNA
Article
Asset Value Trumps Discounted Cash Flow in Another Bankruptcy Valuation Dispute
July 29, 2014
Published by The Brattle Group, Inc.
Article
Solvency Analysis in the Context of Fraudulent Transfer after Eleventh Circuit’s TOUSA Reversal
June 2012
Published in the American Bankruptcy Institute’s Business Reorganization Committee Newsletter
News & Knowledge
December 07, 2017
David McKnight to Participate in The Knowledge Group Webinar on Corporate Restructuring and Bankruptcy

Brattle Senior Associate David McKnight will present during The Knowledge Group’s webinar, “Corporate Restructuring and Bankruptcy: Trends, Developments, and Opportunities for the Year Ahead,” taking place December 7, 2017 from 3-5 pm EST.