Bankruptcy Win for Lender Collections
Irell & Manella LLP successfully represented secured creditor Lender Collections, LLC in connection with the bankruptcy of T3M Inc., which designed and manufactured electric motor powered personal mobility vehicles in the U.S. and China. Prior to the bankruptcy and Irell's involvement, T3M and Lender Collections had been engaged for several years in extensive litigation, stemming from the hostile takeover of T3M by a group of foreign investors.
Following the bankruptcy filing, Irell, on behalf of Lender Collections, was able to convert T3M's bankruptcy case from Chapter 11 to Chapter 7 and obtain the appointment of a trustee. Following the successful appointment of a trustee, Irell immediately engaged in negotiations with the trustee regarding the settlement of Lender Collections' secured claim, which exceeded the aggregate value of the debtor's assets.
On November 27, the bankruptcy court approved a settlement that resulted in Lender Collections receiving the vast majority of T3M's assets, while providing for the sharing of the proceeds obtained from certain litigation between Lender Collections and T3M's estate against various third parties, including former directors and officers. This transaction also was carefully structured in order to allow Lender Collections to take advantage of T3M's substantial net operating losses, which is very rare in Chapter 7 bankruptcy cases.
The Irell team consisted of Jeffrey Reisner, Elliot Freier, Kerri Lyman and Zoya Holladay.