Howard Steinberg is a partner in the Los Angeles office of Irell & Manella LLP. He represents debtors, creditors’ committees, trustees, secured and unsecured creditors, and purchasers of assets in major cases involving public and private companies throughout the United States. He also has extensive experience in out-of-court workouts. He is frequently retained to litigate “bet the company” type cases and has served as lead counsel in numerous bankruptcy court trials.

Mr. Steinberg is the author of a three-volume treatise, Bankruptcy Litigation, published by West Group and is recognized as a leading bankruptcy/restructuring lawyer by Chambers & Partners in its 2011 Chambers USA Leading Lawyers for Business Guide and in the Super Lawyers of California.

Representative Matters

The following is a summary of recent engagements handled, and being handled, by Mr. Steinberg:

In re Spansion, Inc., et al., Bankr. Ct., D. Del., published in 426 B.R. 114 (Bankr. D. Del. 2010).  In this case, the client, Tessera, Inc., (“Tessera”) asserted pre and post-petition patent infringement claims which the debtor claimed were valueless.  As a result of prevailing at contested evidentiary hearings, Tessera’s unsecured claim was estimated at $120 million and its administrative claim in excess of $4 million.  The debtors proposed a plan which did not adequately reserve for Tessera’s claim and the court sustained our plan objection. 

In re Nortel Networks, Inc., Bankr. Ct., D. Del.  Our client, Research in Motion Limited, was part of a consortium of five other leading technology companies who purchased a portfolio of patents for $4.5 billion, one of the largest ever public sales of intellectual property assets.

In re Empire Land, LLC, et al., Bankr. Ct., C.D. Cal.  Representation of a former director of the debtor and its affiliates in a lawsuit by a lender seeking over $100 million in damages.  The court granted our motion for dismissal without leave to amend.

In re Med Diversified, Inc., et al., Bankr. Ct., E.D.N.Y. The client, Private Investment Bank Limited (“Bank”), made a $70 million loan to the debtor. A prepetition lawsuit resulted in a settlement with the Bank being granted a security interest in substantial, additional collateral. After the debtor filed bankruptcy, the Bank was a party to several lawsuits which culminated in settlements implemented through a plan whereby a senior secured lender had its claim of nearly $100 million disallowed, and the unsecured creditors of the debtor and several of its largest subsidiaries received dividends ranging from approximately 20 to 40 cents. The Bank received cash and ownership of the debtor’s subsidiaries, which had a value of in excess of $80 million.

Chartwell Litigation Trust v. Addus Healthcare, Inc., Bankr. Ct., E.D.N.Y., published in 334 B.R. 89 (Bankr. E.D.N.Y. 2005). Litigation claims were assigned to our client, the trust, as part of a plan. In a prepetition transaction, the debtor paid $7.5 million, which had been characterized as an option payment in connection with a $100 million plus purchase price of a business, but failed to close on the purchase. The defendant retained the option payment and both sides sued each other prior to the bankruptcy filing asserting, among other things, breach of contract claims. Rather than pursue those theories, we filed a fraudulent transfer lawsuit to recover the deposit. Following trial, the court announced a tentative ruling in favor of our client and a settlement was reached for $4.1 million.

Landry’s Restaurants, Inc. Landry’s Restaurants, Inc. (Landry’s) owed $400 million to bondholders. Landry’s did not file a 10K in light of issues pertaining to an investigation of the backdating of stock options. We represented the ad hoc committee of bondholders in an out of court restructuring. In light of the failure to file the 10K, an event of default was declared and the debt was accelerated. Landry’s filed suit in federal district court in Texas and agreed to a settlement at a preliminary injunction hearing which involved the payment to the bondholders of a large consent fee and an agreement to exchange the notes for notes with terms which were significantly more advantageous for the bondholders.

In re The Walking Company, Bankr. Ct., C.D. Cal. Representation of secured lender/equityholder in successful chapter 11 reorganization of a retail chain with over 200 store locations.  To facilitate the reorganization, our client provided exit financing and a capital investment.

In re GB Holdings, Inc., Bankr. Ct., D. N.J.  Representation of Pinnacle Entertainment, Inc. in its $250 million acquisition of the Atlantic City Sands Hotel & Casino. Ownership of the hotel and casino had been transferred from the debtor to an entity in which the debtor had an equity interest. The transfer was the subject of claims of fraudulent transfer. Our client acquired the hotel and casino without becoming embroiled in the litigation and did not have to engage in a bidding procedure in connection with the acquisition.

In re Focus Media, Inc., Bankr. Ct., C.D. Cal., published in 378 F.3d 916 (9th Cir. 2004), cert. denied, 544 U.S. 968 (2005). We filed an involuntary bankruptcy petition on behalf of our creditor clients NBC, ABC, and Paxson Communications. Following trial, an order for relief was entered against the debtor, which was upheld on appeal by the United States District Court and Ninth Circuit Court of Appeals.

John Pringle, Trustee v. Thomas Edward Rubin, et. al., Bankr. Ct., C.D. Cal. We acted as special litigation counsel for the trustee in bankruptcy and obtained a judgment in excess of $35 million against insiders of the debtor based upon fraudulent transfer and other claims.

In re Nimitz Partners, LLC, Bankr. Ct., D. Hawaii. Our client, Nimitz Partners, LLC (“Nimitz”), owns two hotels in Honolulu. Nimitz’ lender commenced a foreclosure proceeding in Hawaii State Court and we filed a counterclaim alleging lender liability claims. A settlement was reached whereby the lender’s $38 million claim was significantly reduced and Nimitz filed a prepackaged chapter 11 bankruptcy which was confirmed more rapidly than any previous chapter 11 case in Hawaii. The lender then contended that Nimitz breached the plan by failing to make required renovations and sought an order to have the hotels sold. We filed a second lender liability lawsuit and obtained the right to have the controversy heard by a jury. Shortly before trial, the lender agreed to settle and reduced its claim by over $24 million. Nimitz’ equity holders retained their full interests and were not required to make any out of pocket expenditures during the course of the proceedings.

In re Midland Group, Inc., Bankr. Ct., C.D. Cal., published in 347 B.R. 708 (Bankr. C.D. Cal. 2006). Our client, Swiss Finance Corporation (“SFC”), is a foreign currency trader in London and engaged in currency trades with the debtor. The debtor engineered a $100 million plus Ponzi scheme in the United States, and the trustee in bankruptcy filed a fraudulent transfer complaint seeking a return of all monies that had been transferred to SFC. In a case of first impression, we successfully argued that fraudulent transfer laws do not have extraterritorial application and cannot be used to set aside transactions centered in foreign countries.

Confidential: Representation of the debtor, a media company in an out of court restructuring.

Confidential:  Representation of the debtor, the owner of a retail mall, in restructuring a debt of nearly $200 million.  Claims were asserted against the mall operator, a large public REIT, who held an option to purchase the mall which resulted in a successful restructuring of the debt and a substantial payment to the debtor’s equity holder.

Confidential:  Representation of the secured lender with respect to loans to automobile dealerships in out of court restructurings.

Publications and Lectures

Mr. Steinberg is a nationally renowned authority in the field and has authored a variety of publications on bankruptcy law. He has written a three-volume treatise published by West Group entitled Bankruptcy Litigation (2007); a chapter on bankruptcy law in a book published in Taiwan, Eighteen Chapters on American Law (1992); five chapters in the multivolume treatise, Norton Bankruptcy Law and Practice (1993); a chapter in The Art & Science of Bankruptcy Law (2003); and three chapters in a book published in Switzerland, The Challenges of Insolvency Law Reform in the 21st Century (2006). He has written many articles for, among others, Practicing Law Institute; the Norton Institute; the Business Law Section of the State Bar of California; and as a contributing editor to the CEB Civil Litigation Reporter.

Mr. Steinberg is a frequent lecturer on bankruptcy issues. He served as chairperson of the California Bankruptcy Litigation Conference. He has also been a panelist for, among others, the Business Law Section of the American Bar Association, the Business Law Section of the State Bar of California, the Norton Institute, the Association of Insolvency and Restructuring Advisors, the Canadian Shopping Centre Law Conference, Financial Lawyers Conference, Construction Litigation Superconference, Thompson-West Publishing, National Business Institute, Inc., the Los Angeles County Bar Association, and at an International Insolvency Symposium in Switzerland.  In addition, he has often served as a guest lecturer at The Anderson School of UCLA, the Graduate School of Business.

Professional Activities

Member of the Bankruptcy Committee of the Commercial Law and Bankruptcy Section of the Los Angeles County Bar Association; Member of the Board of the Western Center on Law and Poverty.

Bar & Court Admissions

• 1979, California