Mr. Zimmerman served as lead litigation and trial counsel for NextEra Energy, Inc. in its bankruptcy court trial victory against the Adelphia Communications Recovery Trust, which had sued to recover approximately $300 million for an allegedly fraudulent transfer from Adelphia to two NextEra subsidiaries. The Skadden trial team led by Mr. Zimmerman prevailed in proving that the plaintiff had failed to carry its burden of establishing that Adelphia was insolvent or would have been unable to raise adequate financing to continue operations at the time of the alleged fraudulent transfer. This, notwithstanding the undisputed facts that Adelphia had committed $400 million of financial fraud, exceeded the permissible leverage ratios in its loan documents, and had no unencumbered assets. The successful result was sustained by the district court after an extensive de novo review of the trial record, and subsequently affirmed by the 2nd U.S. Circuit Court of Appeals. The victory was achieved, in part, through a novel argument that combined two concepts courts traditionally analyze independently—namely the question of Adelphia’s access to the capital markets had to be evaluated in light of its $2.5 billion equity cushion (which Mr. Zimmerman’s team proved), tying together the question of Adelphia’s solvency with its prospective access to capital markets, a unique approach endorsed by both the bankruptcy and district courts.
Mr. Zimmerman served as lead litigation and trial counsel for Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc. in their successful trial arising out of a $2 billion financing facility for Solutia, Inc. The lenders had invoked a “Market MAC” provision in refusing to fund the facility on the grounds that there had been an adverse change in the markets, which in their reasonable judgment materially impacted the syndication of the exit facility. Solutia sued to force the lenders to fund the facility. Following trial, Solutia agreed to new loan terms that were substantially more favorable to the lenders, and enabled the lenders to successfully syndicate the financing within 24 hours. The highly visible trial, which was closely followed by the markets, ultimately confirmed the utility of Market MAC provisions as a means to incentivize borrowers to recognize the need to renegotiate loan terms in the face of declining market conditions in order to obtain necessary funding.
Mr. Zimmerman also served as lead litigation and trial counsel for Spectrum Brands, Inc., a Chapter 11 debtor, in its resoundingly successful trial against a consortium of senior lenders. Spectrum was seeking either to reinstate its $1.4 billion senior secured loan or cram-down a plan of reorganization that would adjust certain restrictive covenants in the loan agreement and set a specified interest rate. The senior lenders opposed the amendments and sought a cram-down interest rate of more than double the interest rate proposed by Spectrum. As a direct result of the trial effort spearheaded by Mr. Zimmerman, the lenders agreed to virtually all of the proposed amendments to the loan agreement and to substantially lower their interest rate. As a result, Spectrum will save $500 million in cash interest payments over the next three years.
Mr. Zimmerman also has served as lead litigation counsel in numerous other significant bankruptcy matters. He represented Noble Corp. in securing approvals of two settlements in U.S. Bankruptcy Court, ending a $2.7 billion fraudulent transfer claim; Sterling Chemicals Holdings, Inc. in its successful litigation efforts to obtain a contested priming lien that led to the successful reorganization of the debtor; and Union Pacific Resources Company as the largest producer creditor in the Columbia Gas Transmission Company bankruptcy proceedings, which resulted in Union Pacific receiving an award of approximately $200 million on its claim. Mr. Zimmerman also represented Grove Worldwide LLC; Ames Department Stores, Inc.; Wang Laboratories, Inc.; and United Merchants and Manufacturers, Inc. in various significant litigation matters arising from their Chapter 11 reorganizations.
Mr. Zimmerman secured a major victory for Flightlease Holdings Limited in its breach of contract action against Airbus Industries for wrongful termination of an aircraft purchase agreement. Following four years of intense litigation, Mr. Zimmerman won a summary judgment motion in the Commercial Division of the New York State Supreme Court resulting in an order awarding Flightlease approximately $400 million in damages. Shortly after arguing the appeal in the Appellate Division, First Department, Flightlease was able to obtain a highly successful settlement of its dispute.
In the federal securities area, Mr. Zimmerman successfully argued in the 1st U.S. Circuit Court of Appeals to affirm a dismissal of a roughly $1 billion fraud claim against Cowen & Co. He also successfully argued in the 2nd U.S. Circuit Court of Appeals to affirm dismissals with prejudice that he had obtained of fraudulent transfer claims against Citibank, N.A., federal securities law claims against Jet U.S. Airlines and unfair trade practice claims against AT&T Universal Card. Mr. Zimmerman also obtained dismissals of multimillion-dollar securities class actions against Citizens Communications Co. and against Grow Group, Inc. He also is representing or has represented publicly traded corporations and their officers and/or directors in securities class actions or complex commercial litigations involving the Kroll O’Gara Company; Cowen & Co., LLC; FleetBoston Financial Corporation; and Société Générale.
Mr. Zimmerman served as lead counsel in defending the Long Island Power Authority (LIPA), and successfully argued in the New York Court of Appeals against a highly publicized and politicized challenge to an agreement among LIPA, the Long Island Lighting Company (LILCO) and the state of New York. Under the agreement, LIPA acquired the Shoreham Nuclear Power Plant from LILCO for the purpose of decommissioning and closing the power plant.