October 14, 2016
Curtis Represents Wilmington Trust as Successor Indenture Trustee in Renco Metals Litigation
Curtis is representing Wilmington Trust, N.A. (“Wilmington Trust”) in connection with the Chapter 7 cases of Magnesium Corporation of America (“MagCorp”) in the United States Bankruptcy Court for the Southern District of New York before Judge Mary Kay Vyskocil. MagCorp and its holding company parent Renco Metals originally filed Chapter 11 petitions in 2001. The cases were later converted to Chapter 7 in 2003. Curtis is working with lead litigation counsel Brown Rudnick LLP on this engagement.
Wilmington Trust is the Successor Indenture Trustee under certain Renco Metals 11.5% Senior Notes. The 11.5% Senior Notes were issued by MagCorp parent Renco Metals in 1996, and were due to mature in 2003. The Notes were still outstanding when MagCorp and Renco Metals filed for Chapter 11 in 2001.
Chapter 7 Trustee Lee E. Buchwald initiated litigation on behalf of the MagCorp estate in 2003, asserting that Renco Metals parent Renco Corp. and owner Ira Rennert drove magnesium production unit MagCorp into bankruptcy by using a portion of the proceeds from the issuance of the 11.5% Senior Notes to pay themselves dividends, when those dividend payments left MagCorp effectively insolvent. In 2015, Buchwald obtained a $213 million judgment on that fraudulent conveyance theory. When the Notes were issued and the challenged dividends paid, MagCorp was facing environmental liability litigation from the U.S. Environmental Protection Agency and competitive pressures in the global magnesium market.
The Curtis team working on this engagement includes Restructuring and Insolvency Partners Steven J. Reisman and Cindi M. Giglio, Restructuring and Insolvency Litigation Partner Theresa A. Foudy, Litigation Partner Peter J. Behmke and Corporate Counsel Susana M. Namnum.