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John Penn in Fort Worth Business Press: Expect a 2010 Bankruptcy Surge

The news is full of stories about how lending remains tight. The president invites leading bankers to the White House to encourage more lending. But few expect the free-wheeling days of easy lending to return for quite some time. >>

John Penn Comments on Chrysler Appeal in Bloomberg

When the Supreme Court decided not to hear an appeal from the ruling allowing Chrysler LLC to sell most of the assets, the method used by the high court set off a controversy among bankruptcy cognoscente about the effect on the lower court’s rulings and the implications for other bankruptcy cases. >>

John Penn in Dow Jones Daily Bankruptcy Review: Growth In Prepackaged Bankruptcies

BankruptcyData.com recently released an analysis of corporate Chapter 11 filings and noted the increased number of prepackaged bankruptcy filings in recent years. And there still may be a surge left in the year’s last few weeks. >>

Chambers USA Recognizes Haynes and Boone Lawyers, Practices

Chambers USA: America’s Leading Lawyers for Business 2009 has singled out 36 Haynes and Boone, LLP lawyers in 16 practices for recognition in its annual law firm rankings. The firm was also honored for having 13 separate areas of practice that lead at the state and national levels. >>



Recent Publications

Sec. 1111(b) And Commercial Real Estate Cases

A variety of sources predict a coming wave of commercial real estate problems. The prediction is that many of the acquisitions and refinancing of a few years ago are headed toward maturity in 2009 to 2011. Since many used funding vehicles that no longer exist, the conventional wisdom is that the defaults will soon begin. Just as summer follows spring, bankruptcies follow mortgage defaults.
Guest Column published in Law360, September 21, 2009. Reprinted with permission. >>

Weathering the Storm: Recent Court Decision Exposes the Reach of a Corporate Family’s Financial Distress to its Bankruptcy-Remote Special Purpose Entities and Their Lenders

In the recent heyday of real estate and structured finance, the use of “bankruptcy-remote” special purpose entities (SPEs) as borrowers was a fundamental underwriting requirement by lenders in many loans, and a critical factor considered by ratings agencies, to shield lenders and their collateral from the potentially adverse impact of bankruptcy filings by their borrowers’ parents and siblings. >>



John D. Penn

Partner

Fort Worth


201 Main Street
Suite 2200
Fort Worth, Texas 76102
T +1 817.347.6610
F +1 817.348.2300

Areas of Practice

Education

  • J.D., Baylor University School of Law, 1982
  • B.B.A., Baylor University, 1981

Bar Admissions

  • Texas, 1982

Veteran practitioner John Penn, a former president of the American Bankruptcy Institute, has handled dozens of business bankruptcy cases for a broad spectrum of clients over the last 25 years. In recent cases he has had a leading role in the representation of debtors or major credit constituencies, including retailer The Bombay Company, cargo carrier Kitty Hawk Inc., a large utility supply company and an airline. Outside the courtroom, John, who is Board Certified in Business Bankruptcy Law by both the Texas Board of Legal Specialization and the American Board of Certification, is a frequent speaker, writer and commentator on commercial bankruptcy issues.

Selected Client Representations

  • Represents The Bombay Company, Inc. in its Chapter 11 case.

  • Represented Creditors' Committee in National Benevolent Association, a not-for-profit corporation that owns and operates senior living facilities and facilities for developmentally disabled adults and juveniles. NBA is one of the largest not-for-profit corporations ever to seek Chapter 11 relief.

  • Kitty Hawk, Inc., the nation's largest non-integrated overnight cargo carrier that was successfully reorganized under Chapter 11.

  • Cummins Utility, LP, a large utility supply company.

  • The Trustee for the oldest airline in the United States (and perhaps the world) where the company was sold and airline continues flying.

  • The lender to a manufacturer of meals for military and survival uses where the debt was restructured for a short-term repayment and subordination attempt by the creditors committee was defeated.

  • The lender to an oil "wildcatter" where a plan resolving a "lender liability" lawsuit was confirmed over the debtor's vigorous objections.

  • Defendants in bankruptcy litigation (including preferences, fraudulent transfers and equitable subordination) where cases were compromised at substantial discounts (including "cost of defense" settlements).

Selected Professional Activities

  • Past President and Past Chairman of the American Bankruptcy Institute
  • Past President and Past Chairman of the American Board of Certification

Recent Publications

  • "Sec. 1111(b) And Commercial Real Estate Cases," Bankruptcy Law360, September 21, 2009. 
  • "Weathering the Storm: Recent Court Decision Exposes the Reach of a Corporate Family’s Financial Distress to its Bankruptcy-Remote Special Purpose Entities and Their Lenders," Haynes and Boone Alert, August 25, 2009. 
  • "US Recession - More Bad News On The Way," Financier Worldwide.com, May 29, 2009.
  • "Post-Bankruptcy Pension Cost: Potential Jobs Killer," Bankruptcy Law360, May 15, 2009.
  • "Weathering the Storm: Intellectual Property Rights in Bankruptcy - Everything is for Sale." Haynes and Boone Alert, March 18, 2009.
  • "Pension Shortfalls - The Next Wave?" Bankruptcy Law360, November 14, 2008.
  • "Is this Economic Cycle Going Anywhere We’d Like to Go?" American Bankruptcy Institute, August 9, 2008.
  • "Will Bankruptcy Courts Soon Host More Auctions than Sotheby's?" American Bankruptcy Institute, August 9, 2008.
  • "Roller Coaster Markets," American Bankruptcy Institute, August 9, 2008.
  • "Pensions - The 'Perfect Storm,'" American Bankruptcy Institute, August 9, 2008.
  • "Bankruptcy Reform: Take a Deep Breath and Step Down from the Ledge," American Bankruptcy Institute, August 9, 2008.
  • "Bank Failures - Lessons from the Past," American Bankruptcy Institute, August 9, 2008.
  • "'Risk' and Other Four Letter Words You Should Know," American Bankruptcy Institute, August 9, 2008.
  • "'Bankruptcy Reform' - One Year Later," American Bankruptcy Institute, August 9, 2008.
  • "Supreme Court Holding Allows Bankruptcy Proofs of Claim to be Amended to Recover Attorneys' Fees," April 12, 2007.
  • "Is this Economic Cycle Going Anywhere We'd Like to Go?" American Bankruptcy Institute, September 5, 2006.
  • "Expert Testimony in Litigation: A 'How (not) to Guide,'" September 5, 2006.
  • "Pension Funds: Sailing Into The Perfect Storm," Dow Jones Daily Bankruptcy Review Small-Cap, April 19, 2006.
  • "Will Bankruptcy Courts Soon Host More Auctions than Sotheby's?" Viewpoint/Daily Bankruptcy Review, American Bankruptcy Institute, August 2005.
  • "Bankruptcy Reform: Take a Deep Breath and Step Down from the Ledge," Viewpoint/Daily Bankruptcy Review, American Bankruptcy Institute, July 2005.

Professional Recognition

  • Recognized by Chambers USA 2009 as one of the leading practitioners in the United States for Bankruptcy/Restructuring
  • Recognized as one of The Best Lawyers in America - Bankruptcy and Creditor-Debtor Rights Law (Woodward/White, Inc., 2003-2010)
  • Recognized as a Super Lawyer - Bankruptcy & Creditor/Debtor Rights (2003-2009)
  • Chosen by his peers as one of Fort Worth's 2008 Top Attorneys in Bankruptcy in Fort Worth, Texas, The City's Magazine

Selected Representative Experience


Debtor Representation - Kitty Hawk, Inc.
Represented the debtor-in-possession, a publicly held non-integrated air cargo airline, in its tumultuous Chapter 11 proceedings in Fort Worth, Texas. The case involved the restructuring of $340 million of public bond debt as well as hundreds of millions of bank debt and trade debt.

Debt Restructure and Collections
Represented Southwest Savings Association, Bonnet Resources, Amresco, and Sunbelt Savings Association in connection with the collection of hundreds of loans including, real property foreclosures, personal property foreclosures, litigation, demands for payment, restructurings, and bankruptcies. These loans covered all industries and involved many novel factual and legal issues.

Pangburn Candy Company
Represented the major secured creditor and was able to successfully terminate cash collateral use and obtain repayment of all principal and interest.

Fruehauf Trailer Corporation
Represented the bondholders committee in the Chapter 11 case of this major truck trailer manufacturer.

National Benevolent Association of the Christian Church Disciples of Christ
Our attorneys represented the Creditors’ Committee in this case. After significant litigation, the Creditors’ Committee obtained authority from the court to run a marketing process for this not-for-profit corporation operating senior care living facilities in 10 different states. The debtor had total indebtedness in excess of $250 million. The marketing process, sponsored by the Creditors’ Committee, yielded proceeds sufficient to pay all creditors in full, in cash, plus interest to the date of payment.

Co-Counsel to Official Committee of Unsecured Creditors of Idearc, Inc.
Represent the Official Committee of Unsecured Creditors of Idearc, Inc. in its Chapter 11 case pending in Dallas. Idearc, the publisher of the Verizon Yellow Pages, was spun off from Verizon in 2006 and filed for bankruptcy protection in March 2009. Idearc owes approximately $3 billion in unsecured debt as well as more than $6.8 billion in secured debt.

Representation of Debtor - Bombay Company
Represented Bombay Company, a major national and international home furnishings retailer in efforts to raise capital to continue as a going concern and then in its efforts in Chapter 11 to implement an orderly liquidation of the company’s assets. The Canadian assets were sold as a going concern. U.S. and other international assets were liquidated yielding a full recovery to Bombay’s secured and an approximately 25%-30% recovery to Bombay’s unsecured creditors.

Representation of a Financial Lender
Represented a lender in obtaining confirmation of contested plan of reorganization (while opposing four (4) other plans simultaneously), allowing the one hundred and forty year old company’s operations to continue.

Memberships

  • American Bankruptcy Institute
  • American Board of Certification
  • Tarrant County Bankruptcy Bar Association, Past President

Online Publications

09/21/2009 - Sec. 1111(b) And Commercial Real Estate Cases
A variety of sources predict a coming wave of commercial real estate problems. The prediction is that many of the acquisitions and refinancing of a few years ago are headed toward maturity in 2009 to 2011. Since many used funding vehicles that no longer exist, the conventional wisdom is that the defaults will soon begin. Just as summer follows spring, bankruptcies follow mortgage defaults.
Guest Column published in Law360, September 21, 2009. Reprinted with permission.

08/25/2009 - Weathering the Storm: Recent Court Decision Exposes the Reach of a Corporate Family’s Financial Distress to its Bankruptcy-Remote Special Purpose Entities and Their Lenders
In the recent heyday of real estate and structured finance, the use of “bankruptcy-remote” special purpose entities (SPEs) as borrowers was a fundamental underwriting requirement by lenders in many loans, and a critical factor considered by ratings agencies, to shield lenders and their collateral from the potentially adverse impact of bankruptcy filings by their borrowers’ parents and siblings.

05/29/2009 - US Recession – More Bad News On The Way
The US government just updated its forecast for the economy for the rest of this year. The current prediction is that things will get worse before they get better. This includes more unemployment and a reduced gross domestic product. To make matters worse, there is even some discussion about bond rating agencies dropping US government debt from its exalted AAA status for the first time in history.

Market commentary published in Financier Worldwide.com.

05/15/2009 - Post-Bankruptcy Pension Cost: Potential Jobs Killer
Bankruptcy Law360 Guest Column from Fort Worth Partner John Penn
This economic downturn includes a problem that we have seen before — an ever-growing number of underfunded pension plans. But one big difference this time is that additional fees imposed in 2006 can prevent a company from reorganizing and thereby hasten the day it closes its doors.

03/18/2009 - Weathering the Storm: Intellectual Property Rights in Bankruptcy - Everything is for Sale
Problem: A long-standing competitor is caught by the credit crunch and now cannot refinance its maturing debt. Out of options and trying to save its operations and brand names, your competitor files a Chapter 11 petition to buy time to work with its creditors. What does this mean for you?

Pension Shortfalls – The Next Wave?
Bankruptcy Law360
As Yogi Berra once said, “It’s like déjà vu all over again.” Today’s news about falling stock markets and lower interest rates creates the unmistakable feeling that we’ve been here before – and what followed then wasn’t pretty.

08/09/2008 - Will Bankruptcy Courts Soon Host More Auctions than Sotheby’s?
American Bankruptcy Institute

08/09/2008 - Pensions – The “Perfect Storm”
American Bankruptcy Institute

08/09/2008 - Roller Coaster Markets
American Bankruptcy Institute

08/09/2008 - Bankruptcy Reform: Take a Deep Breath and Step Down from the Ledge
American Bankruptcy Institute

08/09/2008 - Don’t Blame Pension Terminations on Our Bankruptcy System
American Bankruptcy Institute

08/09/2008 - Bank Failures - Lessons from the Past
American Bankruptcy Institute

08/09/2008 - Is this Economic Cycle Going Anywhere We’d Like to Go?
American Bankruptcy Institute

08/09/2008 - “Risk” and Other Four Letter Words You Should Know
American Bankruptcy Institute
The 360+ point drop in the Dow Jones Industrial Average on the anniversary of the 1987 stock market crash sent one four letter word screaming back into the market’s collective conscious. “Risk” – while not exactly one of the seven words you can’t say on the radio, was used so rarely in the past few years that one might have thought it an obscenity. Similar obscenities will follow.

08/09/2008 - “Bankruptcy Reform” – One Year Later
American Bankruptcy Institute

04/12/2007 - Supreme Court Holding Allows Bankruptcy Proofs of Claim to be Amended to Recover Attorneys' Fees
On March 20, 2007, the United States Supreme Court issued a unanimous opinion in Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co., No. 05-1429, 2007 WL 816795 (March 20, 2007), holding that a creditor may supplement its unsecured claim in a bankruptcy case to recover contract-based attorneys’ fees incurred during the bankruptcy case through the litigation of bankruptcy law matters.

09/06/2006 - Is this Economic Cycle Going Anywhere We'd Like to Go?

09/05/2006 - Expert Testimony in Litigation: A 'How (not) to Guide'

04/19/2006 - Pension Funds: Sailing Into The Perfect Storm

Viewpoint/Daily Bankruptcy Review: August, 2005
American Bankruptcy Institute

Viewpoint/Daily Bankruptcy Review: July, 2005
American Bankruptcy Institute

02/01/2001 - Silicon Secrets

02/01/2001 - Literal Licensees, Disappearing Collateral And Other Techie Tricks
as presented to INSOL World
 

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