H. Jeffrey Schwartz

Throughout his career, Jeffrey 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 Dow Corning Corporation, Corinthian Colleges, Inc., Digital Domain Media Group, Inc., Coda Automotive, Inc. and Constar International, LLC.

In the structured finance space, Jeffrey 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 also served as lead counsel to Jay Alix as Examiner of a $450 million fraud in In re Phar Mor, Inc.

Most recently, Jeffrey served as lead bankruptcy counsel for the Chapter 7 trustee for ITT Education, Inc. in the prosecution of D&O claims, fraudulent transfer claims and professional liability claims relating to in excess of $1 billion in catastrophic damages 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.

Jeffrey has served as a board member for Lexford Residential Properties Trust (NYSE: LFT), Insignia Financial Group (NYSE: IFS) and International Total Services (NASDAQ: ITSW).

Honors & Recognitions

• The Best Lawyers in America^©, Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law, New York (2006-2018, 2020-2022)

Education

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

B.A., Cleveland State University, 1976

Experience

• 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 in the reorganization of Cardinal Industries, Inc. Jeff joined the reorganized Cardinal's board of directors and became its general outside counsel. Over a period of years, he 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 in the Chapter 11 case of CODA Automotive, 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 counsel to, and a director of, Insignia Financial Group, Inc., which, together with its affiliates, acquired approximately $13 billion in distressed assets.
• 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. Jeff 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 Jay Alix as Examiner of a $450 million fraud case in In re Phar Mor, Inc.
• Lead counsel to MBIA, Inc., a leading monoline insurance holding company, in the FGIC Corp. Chapter 11 case.
• 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 Jeff, 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. His 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 to the Official Committee of Physician Creditors of Dow Corning Corporation in a landmark mass tort healthcare chapter 11 case involving many billions of dollars of asserted personal injury claims.
• 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 the cessation of operations had operated on more than 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 Plainfield Asset Management LLC, as plan sponsor, construction and DIP lender in the successful reorganization of Kara Homes, Inc., a major residential home builder and developer in the Mid-Atlantic area.
• Lead outside counsel on legal strategist for Port Link, Ltd., in successfully obtaining the release of the $500 million frozen by a Dubai-based bank at the behest of the Kingdoms of Kuwait and the United Arab Emirates (as reported by Forbes).
• 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 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 Winners Industries, a major Asian vendor, in the Sears mega Chapter 11 case; prevailed in establishing administrative priority for vendor claims consensually during pendency of an appeal of lower court’s adverse ruling.  

• 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 to various hedge funds and private equity firms in the restructuring of their distressed portfolio companies.

Professional & Community

• American Bankruptcy Law Institute, Member
• New York City Bar Association, Member

Publications

• "Filing a Proof of Claim: Pitfalls and Precautions," Thomson Reuters (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 (January 2011)
• "Retention and Transfer of Avoidance Claims: Practice Tips and Pitfalls," Norton Annual Survey of Bankruptcy Law (2009)
• "Protection of Net Operating Losses through Trading Injunctions and Forbearance Agreements," Norton Journal of Bankruptcy Law and Practice (December 2008)
• "Purchasing distressed companies: How to use the US bankruptcy system to your advantage," The Americas Restructuring and Insolvency Guide (2008/2009)
• "Forbearance Agreements," New York Law Journal (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 Directors," Delaware Court Reporter (July 14, 2008)
• "Directors’ Fiduciary Duties to Creditors in Insolvency: Equity is the Board’s Favorite Child," Bloomberg Corporate Law Journal (2006)

*Co-authors' names are not included in this listing.