In De Lage Landen Financial Services v. Nidek, Inc. and Nidek Co., Ltd. (U.S. District Court, Philadelphia) Ms. Callahan defended the manufacturer and distributor of laser equipment in a dispute with their former equipment financer concerning the parties' respective rights and obligations under a Master Contract Financing Program Agreement. The lender provided financing to purchasers via equipment leases and contended that defendants were liable for the lender's lost profit under those leases as / when the lessees defaulted. Of the 70 or so leases financed, more than half were in default and threatened to be the subject of protracted litigation nationwide. Ms. Callahan devised a strategy to get the dispute into mediation. The lender agreed to mediate the dispute and a global settlement was reached after several days of mediation. According to the lender, the defendants' exposure was almost $20 Million. The matter was settled for $6.0 Million, paid over one year without interest and included a re-assignment to the defendants of all leases, including the right to pursue collection against the defaulting lessees. Those collection efforts to date have yielded approximately $1.0 Million and, based on the result achieved in the Vision Management case described below, could yield a further return to the defendants of almost $1.5 Million.
In In re Vision Management (Ch.11) (U.S. Bankruptcy Court, Central District, Los Angeles) Ms. Callahan represented the single-largest unsecured creditor (Nidek, Inc.) who was one of the defendants in the De Lage Landen litigation described above. At the time Nidek received the assignment of De Lage Landen's lease default claim in the Vision Management bankruptcy case, the debtor was in the process of seeking confirmation of a plan of reorganization which proposed to pay unsecured creditors only a fraction of a penny on the dollar while allowing the principals of the debtors to retain ownership of a business that generated over $12 Million in revenue per year along with all of the benefits associated with the continued operation of the business (e.g., handsome salaries and expense accounts). Ms. Callahan filed pointed objections to the debtor's proposed plan on behalf of Nidek, which prompted a series of proceedings and negotiations led by Nidek which ultimately resulted in a consensual plan which will pay unsecured creditors about 50 cents on the dollar over 6 years, with an initial distribution of about $1.0 Million during the first year.
In In re ANC Rental Corporation (Ch. 11) (U.S. Bankruptcy Court, Delaware) Ms. Callahan represented a lessor in monitoring the debtors' reorganization efforts, which included the sale of several National Rent-a-Car locations and the assignment of leases to the buyer. Ms. Callahan's client owned one of the leaseholds the buyer was interested in purchasing and Ms. Callahan assisted in the negotiation of the amendment and assignment terms and in shepherding the transaction through the Bankruptcy Court approval process.
In In re Markley (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan entered the case as counsel to the debtor-in-possession's family trust two years after debtor's case was filed and on the verge of conversion to Chapter 7. Within three months, Ms. Callahan obtained abandonment of the bankruptcy estate's interest in the debtor's residence and formulated a plan of reorganization proposed on behalf of the debtor and the debtor's family trust. The primary asset of the debtor was his limited partnership interests in several real estate limited partnerships with The William Lyon Company and his damages claims for conversion and breach of fiduciary duty against The William Lyon Company, General Lyon and others, estimated to be worth in excess of $20 Million. Ms. Callahan worked with the debtor's state court counsel in drafting the amended complaint to state these causes of action, in filing parallel litigation in the Bankruptcy Court, in promulgating discovery and in preparing the state court case for trial which ultimately returned a verdict in favor of the debtor in excess of $50 Million. Ms. Callahan succeeded in having the debtor's plan of reorganization confirmed before the state court litigation was concluded, thereby assuring the debtor of his discharge as to The William Lyon Company's $6+ Million in contract claims should the debtor not be the prevailing party in the state court litigation. Ultimately, the debtor prevailed in his litigation against The William Lyon Company and the bankruptcy case was dismissed pursuant to a settlement with The William Lyon Company.
In International Art Galleries, Inc. (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented the largest creditor, a child prodigy artist, in the collection of unpaid royalties totaling over $2.0 Million and in preserving and asserting the child artist's ownership and intellectual property rights in the limited edition works of art claimed to be property of the debtor's estate. The parties' disputes were resolved after less than 4 months of litigation. At the conclusion of a 3-day mediation effort, the debtor and its principals relinquished and disavowed all rights, title and interest in the artist's artwork and returned possession of all artwork to the artist. Those settlement discussions were facilitated, at least in part, by Ms. Callahan's filing of a "first strike" motion for partial summary judgment challenging the debtor's asserted rights in the artwork based upon a written publishing agreement which was never signed by the artist or approved by a guardianship court.
In In re Charles Diamond (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), a complex case that began as an involuntary Chapter 7 bankruptcy filing against an individual (as distinguished from a business entity), Ms. Callahan represented the debtor and his wife. Ms. Callahan succeeded in having the involuntary petition filed against the debtor's spouse dismissed and also succeeded in opposing the appointment of an interim trustee in the involuntary proceedings initiated against the debtor. Ms. Callahan thereafter devised a strategy for the debtor to file a voluntary Chapter 11 bankruptcy and assisted the Chapter 11 debtor in negotiating and confirming a consensual plan of reorganization in which approximately $4 million in claims were compromised 4 months after the petition was filed. After confirmation, Ms. Callahan shepherded the debtor through the successful implementation of his plan over a 6 year period and obtained a final decree closing the case and granting the debtor his discharge under 11 U.S.C. § 1141.
In In re Hiuka America Corporation (Ch.11) (U. S. Bankruptcy Court, Central District, San Bernardino), Ms. Callahan represented the buyer in acquiring stock and equipment from a bankruptcy estate, which included the negotiation and documentation of a $1.0 Million+ purchase and sale agreement, an environmental indemnity agreement, bills of sale, inter-company debt releases, and appropriate corporate certifications and resolutions.
In In re MedPartners Provider Network, Inc. (Ch.11) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented a hospital provider in liquidating its multi-million dollar damages claim against the debtor and debtor's parent (Caremark Rx), defending against the debtor's offsetting multi-million dollar risk pool liability counterclaim, and spearheading the negotiations which led to a business-solution compromise to the parties' disputes. Ms. Callahan handled all aspects of the settlement, which included take-out financing on a parcel of real property to fund the settlement and orchestrating the concurrent closings of the financing and settlement transactions.
In In re Murray Trenchless, Inc. (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represents a publicly traded fiber optics company in liquidating its breach of contract and charge-off claims against the debtor. At the outset of the case, Ms. Callahan's client was not scheduled as a creditor or recognized by the debtor as its largest single creditor. Through Ms. Callahan's efforts and communications with the Office of the United States Trustee, the "insiders" who had been placed on the Creditor's Committee were removed and Ms. Callahan's client was appointed to the Creditor's Committee. Additionally, through Ms. Callahan's efforts, the debtor's attempt to remove pre-existing state court litigation concerning the aforementioned breach of contract and charge-off claims was foiled and the matter was returned to the Texas State Court for adjudication.
In In re L.J.C. Restaurants, Inc. (U. S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented the original lessor of a leasehold involving prime, waterfront property located in Newport Beach with respect to the preservation of its rights against the debtor and the debtor's bankruptcy estate under a pre-petition sublease which had been assumed by the Chapter 11 debtor-in-possession prior to the case being converted to a proceeding under Chapter 7. Through Ms. Callahan's efforts the leasehold was secured and the locks were changed immediately after the conversion so as to protect the leasehold and its contents from vandalism and looting; a buyer was located and a purchase/sale/assumption agreement was negotiated under the terms of which the original lessor was made financially whole and the value of the leasehold as an established restaurant location preserved.
In In re Cheri Bay (Ch. 7) (U. S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented a creditor in related civil, criminal and bankruptcy proceedings aimed at obtaining a recovery from the debtor who embezzled over $1.3 Million. These efforts included the successful prosecution of a nondischargeability action against the debtor under 11 U.S.C. § 523(a)(2) and (a)(6).
In In re Yeriko Nitta / dba The Seacliff Motel (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a group of secured creditors holding perfected liens against the debtor's primary asset -- a motel located in Laguna Beach. Through the bankruptcy the debtor hoped to strip the secured creditors of their liens and to pay them $.05 on the dollar in satisfaction/discharge of the allegedly "undersecured" portion of their claims. Ms. Callahan defeated these efforts by filing appropriate objections to the debtor's proposed plan of reorganization and, concurrently, prosecuting a relief from stay motion aimed at obtaining an order which would allow the secured creditors to proceed with nonjudicial foreclosure proceedings against the property. The matter was ultimately resolved through a settlement with the debtor in which the debtor acknowledged and affirmed the secured status of the secured creditors' claims in full and agreed to a payout plan which allowed the secured creditors to maximize their return from the operation and sale/refinancing of the motel property (including recovery of their attorney's fees in full).
In In re California Valley Associates (Ch. 11) (U.S. Bankruptcy Court, Central District, San Bernardino), Ms. Callahan represented the Chapter 11 debtor-in-possession and confirmed and consummated a plan of reorganization 11 months after the petition was filed. In this case, Ms. Callahan facilitated the restructuring of over $18,000,000 in secured debt held by Downey Savings & Loan Association; coordinated the abatement of the earthquake damage which had been sustained by the Yucca Valley Shopping Center in 1992 (the debtor's primary asset); negotiated a resolution of the litigation between the debtor and its primary secured creditor; concerning the utilization and disbursement of approximately $3,000,000 in earthquake insurance proceeds; and created and implemented a plan for pursuing the design/construction defect claims associated with some of the structures located at the shopping center and for allocating the potential recovery among the various parties claiming to be interested in that recovery.
In In re Mark Industries, Inc. (Ch. 11) (U.S. Court of Appeals, Ninth Circuit, and U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a former director of a corporate Chapter 11 debtor. Through the use of a strategic, first-strike 12(b)(6) motion, Ms. Callahan succeeded in obtaining dismissal of the Chapter 11 Bankruptcy Trustee's complaint with prejudice. That complaint challenged the propriety of a $2.2 million stock redemption that was consummated within a year of the corporation's filing for bankruptcy protection. The Trustee's complaint was based upon California Corporations Code Section 316 and sought to hold directors who voted to approve the repurchase strictly liable for the amount paid out to the minority shareholders. The first-strike motion to dismiss was sustained by the Bankruptcy Court on both standing and statute of limitations grounds and was later affirmed by the District Court and the Ninth Circuit on appeal by the Chapter 11 Bankruptcy Trustee.
In In re KaWES And Associates, Inc. (Ch. 11) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented the largest unsecured creditor in connection with its role as a member of the Creditor's Committee and its positions taken in response to various matters put before the Bankruptcy Court for decision. Ms. Callahan also represented this creditor in state court litigation against the debtor's officers and directors seeking compensatory damages on alter ego and breach of corporate fiduciary duty grounds. As a result of aggressive discovery directed to the defendants and third parties, evidence was developed which encouraged the defendants to settle with the creditor / plaintiff within 6 months of the filing of the state court action, with a recovery of approximately $250,000 on a principal obligation of approximately $350,000.
In In re Rivermeadows Associates, Ltd. (Ch. 11) (U. S. Bankruptcy Court, District of Wyoming), Ms. Callahan represented the general partner of the partnership debtor in objecting to confirmation of a plan of reorganization proposed by the Chapter 11 Trustee. In formulating the objection to the Trustee's plan, Ms. Callahan worked with tax consultants in analyzing the myriad tax issues created by the Trustee's sale of all partnership assets in evaluating the financial feasibility of the Trustee's proposed plan. Ms. Callahan also developed arguments in favor of the dissenting general partner related to releases proposed to be given to non-debtor parties under the plan which, if allowed to occur, would prevent the general partner from later seeking damages from the Trustee for breach of fiduciary duty and disgorgement for failure to disclose business relationships with creditors and interested parties in the case pre-dating and continuing after his appointment as Trustee.
In In re Burbank Hill Properties, Inc. (Ch. 11) (U. S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented the FDIC in its capacity as a secured creditor holding a $1,000,000 note secured by a first trust deed against 119 acres of raw land which the debtor proposed to develop into a custom-home residential subdivision. Ms. Callahan coordinated the development of appraisal and feasibility evidence to show that the debtor had no equity in the property and that the proposed project was not feasible. Through the use of strategic depositions taken in connection with preparation for the final hearing on the FDIC's relief from stay motion, Ms. Callahan was able to create an opportunity to negotiate a stipulation for relief from stay with the debtor, thereby allowing the FDIC to obtain relief from stay without incurring the attorney's fees, costs and expert witness fees that would have been necessary if a contested evidentiary hearing on the relief from stay motion had been held.
In In re South Bay Medical Center, Inc. (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a medical partnership in the successful defense of a preference action involving over $2.2 million in alleged preferential payments made within one year of the filing of the debtor's bankruptcy petition. The issues in this case involved the "new value" defense under 11 U.S.C. § 547(c), who qualifies as an "insider" of the debtor outside the specific definitions contained in 11 U.S.C. § 101(31)(C), and the solvency of the debtor for purposes of testing the prima facie basis for the preference claim under 11 U.S.C. § 547(b)(3). Ultimately, the avoidance complaint was voluntarily dismissed by the bankruptcy trustee without payment of even a "nuisance" settlement by the avoidance defendants as a result of expert testimony developed on behalf of the defendant showing that the bankruptcy trustee's methodology for establishing the debtor's insolvency was flawed.
In In re Castellucci (Ch. 11) (U.S. District Court, Central District, San Fernando Valley) Ms. Callahan was brought into the case to evaluate and develop a defense strategy to a Rule 9011 sanctions claim asserted against the firm (Arter & Hadden) and the firm's client seeking a monetary recovery in excess of $1.0 Million. Ms. Callahan was also asked to evaluate and develop a defense strategy to the debtor's motion seek to disqualify the firm, which was tied to the sanctions motion because it alleged conflicts of interest and other ethics violations. Ms. Callahan was successful on both fronts. Disqualification was denied and only a small sanctions award was assessed ($15,000) because the Bankruptcy Judge found that the prior attorney handling the matter had committed a technical violation of the Bankruptcy Code that he should have known about and that resulted in the other party incurring unnecessary law and motion expense to correct the infraction.
In In re Cohen Medical Corporation, dba Tower Health (Ch.11) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represents several hospital providers under common management in asserting their pre-petition claims against the debtor's estate, monitoring the debtor's bankruptcy case, and evaluating sources of reimbursement outside the debtor's bankruptcy estate.
In In re Maxicare, Inc. (Ch.11) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented several hospital providers under common management in asserting their pre-petition claims, working with the Creditors Committee and Examiner to implement processes and procedures for payment of post-petition claims, monitoring the debtor's liquidating reorganization, and evaluating sources of reimbursement for pre- and post-petition emergency room claims outside the debtor's bankruptcy estate.
In In re KPC Medical Management (Ch.7) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented several hospital providers under common management in asserting their pre- and post-petition claims against the debtor's estate, monitoring the debtor's bankruptcy case, and evaluating sources of reimbursement outside the debtor's bankruptcy estate.
In In re Pomona Valley Medical Group, Inc., dba Promed Health Network (Ch.11) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan represented a hospital provider in asserting its pre- and post-petition claims and in negotiating a settlement and payment plan with respect to those claims.
In In re Universal Broadband Networks (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a computer accessories equipment lessor in asserting its claim and attempting to recover equipment leased by the debtor.
In In re The Big Store (Ch. 11) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a computer components equipment lessor in asserting its claim and obtaining recovery of its equipment from the debtor.
In In re Directwave, Inc. (Ch. 7) (U.S. Bankruptcy Court, Central District, Santa Ana), Ms. Callahan represented a general unsecured creditor in successfully defending against the preference claims asserted by the Ch. 7 Trustee.
In In re Custom Decor Center, L.P. (U.S. Bankruptcy Court, Central District, San Bernardino), Ms. Callahan represented the FDIC as Receiver in negotiations with the debtor and the debtor's principles who were guarantors on the debtor's loan, which resulted in a successful sale of the underlying real property collateral and maximized the cash recovery to the FDIC in less than 12 months from the date of the bankruptcy filing.
In In re Wong (Ch. 7) (U.S. Bankruptcy Court, Central District, Los Angeles), Ms. Callahan successfully represented a creditor in challenging the debtor's homestead and pension plan exemptions, resulting in a recovery to the estate of over $90,000. Ms. Callahan also prosecuted and successfully mediated a resolution of the creditor's claims against the debtor, resulting in the creditor being paid in full on its secured contract debt of $125,000.
Out-of-Court Workouts and Business Liquidations. Ms. Callahan has successfully liquidated several small businesses and, in the process, has orchestrated work-out plans with the companies' creditors so as to allow the former principals to pursue other avenues of employment or investment without being burdened by the liquidated company's debts. Ms. Callahan has also worked with professionals, self-employed individuals and closely-held businesses that have experienced a sudden business reversal or have become embroiled in litigation that threatens to deplete their personal estates either through the cost of litigation or the exposure created by the potential judgment. In these matters, Ms. Callahan has developed litigation strategies aimed at avoiding / minimizing litigation costs, obtaining summary judgment in favor of the client or persuading the other side to come to the negotiating table.
Mediation. As a mediator, Ms. Callahan has handled over 30 mediations involving contract, fraud and bankruptcy issues. Of the matters handled to date, approximately 60 to 70% of the mediations have resulted in settlements crafted during the mediation process. As a mediation advocate, Ms. Callahan has been involved in several multi-million dollar disputes, of which approximately 60% have been successfully resolved through mediation.