Attorney Donald C. Darnell's Legal Cases

Chapter 11 bankruptcy

Accounting Firm Reorganization

Nov 06, 2013

OUTCOME: Chapter 11 confirmed. Secured debt crammed down to 20% of total debt. Priority debt paid over life of plan, also eliminating personal liability for owners.

Accounting firm with significant debt resulting from financed acquisitions of competitors. Business also had significant tax debt. Client was no longer able to maintain debt payments. Value of asset ... s was less than ten percent of debt. Business had consistent cash flow, if somewhat seasonal (tax season). Practical difficulty of case resided in several parties' interest in cash collateral, and confirming a plan in the context of the absolute priority rule.

Chapter 11 bankruptcy

Reorganization of Professional Building

Oct 31, 2013

OUTCOME: Chapter 11 confirmed.

Professional building in Metro Detroit with secured debt amounting to three times the value of the building. As a result of pre-bankruptcy planning, Client had an additional secured class that was imp ... aired by the plan of reorganization, yet was willing to vote for the Plan, which made filing a case possible. Ultimately, the creditor/mortgagee was also convinced to vote for the Plan after we provided considerable detail as to the value of the building. Plan committed all income to plan and pays off mortgage, crammed down by two-thirds, over a period of 15 years. The absolute priority was handled with an auction of the membership interest with the current owner with a stalking-horse bid that allowed the owner to pay in new value in annual payments over a period of time.

Chapter 11 bankruptcy

Liquor Store Reorganization

Aug 01, 2013

OUTCOME: Chapter 11 confirmed. Objections resolved after limited discovery.

While Client had little trade debt, it had not filed federal or state quarterly reports for three years. IRS had assessed reasonable taxes to Client, but State of Michigan, in typical form, had assesse ... d triple the amount as to what was reasonable. Practical difficulty in form of poor record-keeping, multiple interests in cash collateral, the absolute priority rule, and objections to the claim by the State of Michigan.

Chapter 11 bankruptcy

Restaurant Reorganization / Personal Ch. 11

Mar 31, 2013

OUTCOME: Settled by Mediation. Both Chapter 11 cases were voluntarily dismissed and all adversary proceedings were dismissed .

Emergency filing after ex-partner had taken a judgment against the business and owner. Significant issues presented in viability of the business due to oppressive lease terms (judgment creditor was als ... o the landlord) and cross allegations of a default of a settlement agreement related to the judgment. Case generated three adversary proceedings related to lease and settlement agreement. The Court ordered mediation of all cases, resulting in a settlement agreement after two full days of mediation. Unfortunately, the Parties thereafter litigated the details of the settlement agreement for months, but ultimately were able to come to a final agreement in which the business was sold to the creditor/landlord on terms which were 400% of the value of the business. All debts of the business and owner were settled and paid as a result of the final settlement agreement and the funds from the sale.

Chapter 11 bankruptcy

Construction Company Reorganization

Feb 01, 2013

OUTCOME: Filed three Chapter 11 cases for construction business and principals. Confirmed all three cases with agreeable "on-season" payments.

Clients in default of large loan cross-collateralized against all personal assets and business assets. A significant practical difficulty was poor cash-flow at time of filing.

Donald C. Darnell's Legal Cases (5)

Accounting Firm Reorganization

Reorganization of Professional Building

Liquor Store Reorganization

Restaurant Reorganization / Personal Ch. 11

Construction Company Reorganization