Steven B. Smith focuses his practice on complex corporate restructuring, liquidations and bankruptcy litigation, including in-court Chapter 11 and Chapter 15 cases and out-of-court workouts. He has extensive experience representing distressed debt investors, bondholders, official and ad-hoc creditor committees, administrative and collateral agents, indenture trustees, stalking horse and other asset purchasers, trade and tort claimants, and other significant parties-in-interest in a variety of jurisdictions across the United States.

Steve is also experienced in the analysis of true sale, non-consolidation, and bankruptcy remoteness principles in opinion and related contexts and has lectured on the topic on numerous occasions.

Steve played an active role in the following reported decisions:

  • Bricklayers and Trowel Trades International Pension Fund v. Wasco, Inc., 2015 WL 9459945 (M.D. Tenn. 2015)
  • In re TS Employment, Inc., 2015 WL 4940348 (Bankr. S.D.N.Y. 2015)
  • In re Intermet Corp., 2009 WL 2868749 (Bankr. D.Del. 2009)
  • In re XO Communications, Inc., 2008 WL 4587118 (C.A.2 (N.Y.) 2008)
  • In re Whitehall Jewelers Holdings, Inc., 2008 WL 2951974 (Bankr. D.Del. 2008)
  • Houlihan Lokey Howard & Zukin v. High River Limited Partnership, 369 B.R. 111 (S.D.N.Y. 2007)
  • In re Muscletech Research and Development, Inc., (2006), 19 C.B.R. (5TH) 57 (Canada)
  • In re Ad Hoc Committee of Tort Victims, 327 B.R. 138 (S.D.N.Y. 2005)
  • In re XO Communications, Inc., 323 B.R. 330 (Bankr. S.D.N.Y. 2005)
  • In re XO Communications, Inc., 330 B.R. 394 (Bankr. S.D.N.Y. 2005)
  • In re Exide Technologies, Inc., 299 B.R. 732 (Bankr. D. Del. 2003)

While in law school, Steve served as a judicial intern to Chief Judge William H. Gindin of the U.S. Bankruptcy Court for the District of New Jersey.

Ultra Petroleum Corporation et al. v. Ad Hoc Committee of OpCo Unsecured Creditors,
No. 21-20008 (5th Cir. 2022)

  • Make-whole provisions—common provisions in credit agreements providing for lump sum payments to compensate a lender for unpaid interest if a borrower prepays—have been the subject of litigation concerning whether a claim for a make-whole payment is disallowed under the Bankruptcy Code.
  • In the recent Fifth Circuit decision, Ultra Petroleum Corp. v. Ad Hoc Committee of OpCo Unsecured Creditors,[1] the Court addressed the consequential question against enforceability, holding that make-whole payments are equivalent to impermissible unmatured interest.
  • The Ultra Petroleum decision was the first circuit court case to directly answer the question of whether make-whole payments are generally allowable, and it broke with lower court decisions allowing claims for make-whole payments.

Continue Reading Considering the Allowability of “Make-Whole Payments” in Bankruptcy

Herrick’s Work on Behalf of Well-Renowned Bankruptcy Professors Supported Dismissal

In October 2021, LTL Management LLC (“LTL”), an entity created by Johnson & Johnson (“J&J”) to hold its liabilities to cancer victims exposed to talc in J&J’s products, filed for Chapter 11 bankruptcy protection. The Herrick team filed amicus briefs on behalf of a group of well-renowned bankruptcy professors in support of the Official Committee of Talc Claimants’ motion to dismiss LTL’s chapter 11 case.Continue Reading Third Circuit Court of Appeals Reverses Bankruptcy Court’s Decision and Dismisses the Chapter 11 Case filed by J&J entity LTL

Restructuring and Finance Litigation partner Steven B. Smith recently met with Phil Neuffer, the Managing Editor of ABF Journal, to discuss the recent United States Supreme Court decision Siegel v. Fitzgerald, No. 21-441, in which the Court unanimously held that a significant quarterly  fee increase applicable to debtors in the United States Trustee

Some recent high profile restructuring debtors made multi-million dollar retention bonuses on the eve of bankruptcy filings. The U.S. Government Accountability Office (GAO) took notice of these pre-petition payments and, in September 2021, published a report with data showing that debtors may be “working around the [Bankruptcy] Code’s restrictions” by paying bonuses prior to filing

The U.S. Bankruptcy Court for the District of Delaware recently denied the US Trustee’s motion to compel post-confirmation quarterly fees from Paragon Offshore, plc under 28 U.S.C. § 1930.[1]

The court described the case’s facts as simple: Paragon (and some related entities) filed for Chapter 11 in early 2016. In June of 2017, its reorganization plan was approved. The plan established a litigation trust (the Paragon Litigation Trust) to pursue certain claims against third parties. The plan (and the litigation trust agreement) became effective in July of 2017, and the claims were transferred into the trust from July through September 2017 (without Paragon retaining any interest in or control over them). During that time, Paragon’s distributions exceeded $623 million, and Paragon paid the US Trustee the then-applicable maximum fee for those distributions under 28 U.S.C. § 1930.

In December of 2017, the litigation trust brought its claims against third parties. The case settled for $90.375 million (approved in February of 2021), and the settlement payments to the trust occurred in mid-March. The trust began distributing those payments to its beneficiaries, and the US Trustee moved to compel Paragon and the Paragon Litigation Trust to pay post-confirmation quarterly fees under Section 1930(a)(6) based on the trust’s payments to its beneficiaries.
Continue Reading Paragon Offshore, plc: US Trustee Denied Quarterly Fees Based on Litigation Trust’s Payments to Its Beneficiaries