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Overview

H. Jeffrey Schwartz is a Principal in McKool Smith's New York office.  Mr. Schwartz has more than 30 years of experience representing debtors, secured lenders, fiduciaries and official creditors’ committees in major restructuring and reorganization matters.

Throughout his career, Mr. Schwartz has led successful engagements on behalf of debtors such as the Bayou Funds LLC and PTC Steel Alliance, Inc., as well as official creditors’ committees, including those formed in the bankruptcies of Corinthian Colleges, Inc., Digital Domain Media Group, Inc., Coda Automotive, Inc., and Constar International, LLC. In the structured finance space, Mr. Schwartz has represented MBIA, Inc. in the Chapter 11 reorganization case of FGIC Corporation as well as various private equity and hedge funds in other major Chapter 11 cases. He was also Lead Counsel to Jay Alix as Examiner of a $450 Million Fraud in In re Phar Mor, Inc.

Most recently, Mr. Schwartz served as lead counsel for the Chapter 7 trustee for ITT Education, Inc. in the prosecution of D&O claims and for the Official General Unsecured Creditors Committee of Corinthian Colleges, Inc., the largest for-profit post-secondary education provider to file for Chapter 11 reorganization. 

He served as a law clerk for Hon. Joseph T. Molotris and Hon. William J. O’Neill of the U.S. Bankruptcy Court for The Northern District of Ohio.

Experience

Representative Matters

Prior to joining the firm:

  • Lead Counsel to Jay Alix as Examiner of a $450 Million Fraud in  In re Phar Mor, Inc.

  • Lead counsel to various hedge funds and private equity firms in the restructuring of their distressed portfolio companies.
  • Lead counsel to the Official Committee of Unsecured Creditors of Corinthian Colleges, Inc., one of the largest for-profit post-secondary education companies in the United States and Canada, which before cessation of operations had operated on over 100 campuses, a student enrollment of 74,000 and revenues of $1.2 billion.
  • Lead counsel to the Official Committee of Unsecured Creditors in the Chapter 11 case of Constar International Holdings LLC.
  • Lead counsel to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Digital Domain Media Group, Inc. and affiliated debtors.
  • Lead counsel to MBIA, Inc., a leading monoline insurance holding company, in the FGIC Corp. Chapter 11 case.
  • Lead counsel in the Chapter 11 case of CODA Automotive, Inc.
  • Lead counsel in the PTC Alliance, Inc., et al., Chapter 11 cases, led their representation in their successful disposition, under Section 363 of the Bankruptcy Code, to their hedge fund debt and equity sponsor.
  • Lead counsel in the Bayou Entities Chapter 11 reorganization cases.  Led their representation and obtained victories for their estates. In that landmark decision, Bayou Accredited Fund, LLC v. Redwood Growth Partners, motion was granted for summary judgment on behalf of the Bayou Hedge Funds against 18 redeeming investors to recover payments of invested principal and fictitious profits. The decision contains the most comprehensive statement and application to date of the rules of decision applicable to the good faith defense under section 548 (c) of the Bankruptcy Code. Bayou Superfund, LLC v. WAM Long/Short Fund II, L.P. (In re Bayou Group, LLC), 362 B.R. 624 (Bank. S.D.N.Y. 2007) (denial of motions to dismiss).  In re Bayou Group, LLC, 372 B.R. 661 (Bankr. S.D.N.Y. 2007) (denial of motions to dismiss). Bayou Accredited Fund, LLC v. Redwood Growth Partners, L.P. (In re Bayou Group, LLC), 396 B.R. 810 (Bankr. S.D.N.Y. 2008) (memorandum decision on cross-motions for summary judgment). 
  • Lead counsel to the Senior Lender Group in APW Ltd. et al. (including Greenwich Street Capital Partners, Candlewood Capital Partners LLC and the Royal Bank of Scotland). This entailed the initiation or participation in insolvency proceedings in the United States, United Kingdom, Poland, Germany, Italy and France and implicating substantial assets in China and India.
  • Lead counsel to Plainfield Asset Management LLC, as plan sponsor, construction and DIP lender in the successful reorganization of Kara Homes, Inc., a major residential homebuilder and developer in the Mid-Atlantic area.
  • Lead counsel to and co-chairman of the board of directors of International Total Services, Inc. (ITSW), a publicly held provider of pre-board aviation screening services with 14,000 employees in Europe, North America and Pacific Rim nations. On September 11, 2001, no ITSW-managed security checkpoints were breached by terrorists; the company, then deeply insolvent, filed its Chapter 11 case on September 13, 2001. ITSW responded to the national emergency by fully satisfying the request of the U.S. Department of Transportation to provide an expanded national level of pre-board aviation screening services under an unprecedented transitional contract with the Transportation Security Administration, under which the TSA provided debtor in possession financing to ITSW. There is no historical precedent in the annals of American bankruptcy practice for this outcome. Mr. Schwartz superintended a debtor in possession as it helped reestablish nationwide aviation security in the aftermath of direct attacks on the U.S.
  • Lead counsel to what is generally considered one of the most successful recent restructurings of a public company, NCS HealthCare, Inc. NCS HealthCare, Inc. had an enterprise value initially estimated at $175 million facing resolution of $206 million of defaulted senior debt, $103 million in defaulted publicly held notes and approximately $55 million in defaulted trade debt. Spearheaded by Mr. Schwartz, the outcome of the restructuring was that no bankruptcy case for the company was commenced, all creditors were paid in full with accrued interest and the public equity holders received approximately $140 million. Mr. Schwartz’s representation of NCS HealthCare, Inc. in its restructuring is reflected in a landmark decision rendered by the Supreme Court of Delaware, Omnicare v. NCS Healthcare, Inc.
  • Lead counsel of Court Square LLC and CVC Venture Capital as majority shareholders in the successful Remy International, Inc. prepackaged Chapter 11 reorganization case (resolving in excess of $1 billion of indebtedness).
  • Lead outside bankruptcy counsel to one of the largest publicly held shopping center REITs in various of its major tenant Chapter 11 cases.
  • Lead counsel in the reorganization of Cardinal Industries, Inc.  Mr. Schwartz joined the reorganized Cardinal's board of directors and became its general outside counsel. Over a period of years, Mr. Schwartz superintended the transformation of the $1 billion distressed NASDAQ small-cap real estate and controlled management C corporation into an NYSE-listed apartment REIT and, subsequently, its merger into Equity Residential Properties, Inc., achieving a 30 percent-plus compounded annual rate of return for creditors taking exchange securities for their debt. 
  • Lead counsel to, and a director of, Insignia Financial Group, Inc., which, together with its affiliates, acquired approximately $13 billion in distressed assets.

Recognition

Rankings & Honors

  • Listed in The Best Lawyers in America (2016-2018)
  • Named a "New York Super Lawyer," Super Lawyers (2004-2006, 2008-2017)
  • Named a "New York Area Top AV Rated Lawyer," The American Lawyer Legal Leaders (2015)
  • Named one of  "New York’s Top Attorneys," Woodward/White (2013)
  • Recognized in Chambers USA 

Affiliations

Community & Professional Activities

  • American Bankruptcy Law Institute
  • New York City Bar Association

Media & Events

Articles

Publications

  • Filing a Proof of Claim: Pitfalls and Precautions Thomson Reuters (Co-author) (December 1, 2016)
  • Sponsor Directed Secured Claim § 363(k) Cram Down Credit Bidding: The New Thermonuclear Bankruptcy M&A Strategic Weapon
    Bloomberg Law Reports - Bankruptcy Law, Vol. 5, No. 3 (Co-author) (January 2011)
  • Retention and Transfer of Avoidance Claims: Practice Tips and Pitfalls
    Norton Annual Survey of Bankruptcy Law (Co-author) (2009)
  • Protection of Net Operating Losses through Trading Injunctions and Forbearance Agreements Norton Journal of Bankruptcy Law and Practice (Co-author) (December 2008)
  • Purchasing distressed companies: How to use the US bankruptcy system to your advantage The Americas Restructuring and Insolvency Guide (Co-author) (2008/2009)
  • Forbearance Agreements New York Law Journal (Co-author) (September 8, 2008)
  • Protection of Net Operating Losses through Trading Injunctions and Forbearance Agreements Norton Journal of Bankruptcy Law and Practice (September 2008)
  • Delaware Bankruptcy Court Decision Illustrates that a Sound Decision-Making Process is Critical to Protect Director sDelaware Court Reporter, (Co-author) (July 14, 2008)
  • Current Loan-to-Own Strategies Dechert LLP Restructuring and Reorganization Report (Co-author) (Spring 2008)
  • Developments in Fraudulent Transfer Law in the Context of a Fraudulent Investment Scheme Dechert LLP Restructuring and Reorganization Report (Co-author) (Spring 2008)
  • Directors’ Fiduciary Duties to Creditors in Insolvency: Equity is the Board’s Favorite Child Bloomberg Corporate Law Journal (2006)

Education

J.D., Cleveland Marshall College of Law, 1979.

B.A., Cleveland State University, 1976.

Court Admissions

  • New York
  • Ohio
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