Overview
James (Jay) W. Kapp, III, focuses his practice on corporate bankruptcies, reorganizations (including prepackaged and prearranged bankruptcy filings), out-of-court restructurings (including distressed financings and workouts), and creditor rights representation (with an emphasis on representing bondholders, indenture trustees and other secured creditors). Jay has significant experience representing debtors and creditors (secured and unsecured) with respect to such bankruptcy and restructuring matters.
Jay counsels interested buyers in the acquisition of distressed assets out of court (including Uniform Commercial Code (UCC) foreclosures and assignments for the benefit of creditors) and through bankruptcy proceedings (including 363 sales and plans of reorganizations). In addition, Jay advises board of directors of insolvent companies with respect to fiduciary duties and related concerns.
Results
- Represented Wellpath Holdings, Inc. and certain of its affiliates in their chapter 11 cases in the US Bankruptcy Court for the Southern District of Texas. Wellpath is the leading provider of healthcare to vulnerable patients in challenging clinical environments and had debt obligations of approximately $650 million as of the chapter 11 filing. The representation included a court-approved sale of Wellpath’s Recovery Solutions division for a purchase price of $395 million and the reorganization of Wellpath’s Corrections business. Wellpath filed its chapter 11 cases with a restructuring support agreement signed by 85% of its first-lien lenders and more than 80% of its second-lien lenders, through which Wellpath secured an approximately $326 million debtor-in-possession financing facility. McDermott negotiated and Wellpath issued, upon exit, a $135 million first lien takeback credit facility and $50 million equity investment from a group of first- and second-lien lenders
- Represented a public university in the successful acquisition of a cancer institute that had filed for Chapter 11 in Las Vegas; in particular, the client was designated the “stalking horse” purchaser and participated in the debtor’s 363 sale process
- Represented a client in the successful acquisition of Arizona Health Institute, pertaining to its cardiology and cardiovascular practice in the debtor’s Chapter 11 case filed in Phoenix, Arizona
- Represented a French company in disrupting jurisdictional issues with respect to a Chapter 15 proceeding initiated in Delaware bankruptcy court
- Represented a bond insurer in a $2.9 billion exposure to an insolvent student loan syndicator in a Massachusetts Chapter 11 proceeding
- Represented a wholesale distributor of groceries with respect to the Chapter 11 filing of its sole supplier in Delaware, including the pursuit of approximately $20 million in secured, administrative and set off claims and the defense against threatened assertions of fraudulent conveyance claims with respect to related transactions
- Represented an indenture trustee with respect to its interests in a distressed hockey facility, which filed for Chapter 11 protection in Chicago, Illinois
- Represented 14 domestic affiliates as debtors in Chapter 11 cases filed in the Western District of New York, which culminated in the negotiation (including with the debtors’ unions) and confirmation of a plan of reorganization that provided the debtors’ second lienholder majority ownership of the reorganized company; such matter also involved significant issues arising from the debtors’ pursuit of a key employment retention program pursuant to the Bankruptcy Abuse and Consumer Protection Act of 2005
- Represented debtors in their Louisville, Kentucky, Chapter 11 cases; the Chapter 11 cases were confirmed in approximately six months and involved the auction and sale of substantially all of the debtors’ assets, as well as the initiation and pursuit of an adversary proceeding to recharacterize certain leases as secure financing agreements
Recognitions
- Best Lawyers in America, Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law, 2023-2025
- Legal 500 US, Recommended, 2019-2024
- IFLR1000, Restructuring & Insolvency, 2022-2023
- Illinois Super Lawyer
Community
- Luther Memorial in Chicago (Lincoln Square), Illinois, governing council and stewardship committee
Credentials
Education
University of Minnesota Law School, JD, magna cum laude, 1994
Northwestern University, BS, 1991
Admissions
Illinois
Kansas
Missouri
Courts/Agencies
US Court of Appeals for the Third Circuit
