SOURCE: Cooley Godward Kronish LLP

April 05, 2007 13:15 ET

Cooley Team Prevails for Unsecured Creditors in Retail Bankruptcy Dispute

NEW YORK, NY -- (MARKET WIRE) -- April 5, 2007 -- Cooley Godward Kronish LLP's bankruptcy and restructuring practice has prevailed for the unsecured creditors of Norstan's, a women's budget retailer, in the denial of a motion to dismiss a $67 million fraudulent transfer lawsuit arising out of a $53 million leveraged buyout and an earlier distribution of $14 million to insider shareholders.

The decision was issued in the U.S. Bankruptcy Court's Eastern District of New York on March 30 by Chief U.S. Bankruptcy Judge Carla E. Craig. The lawsuit, on behalf of the unsecured creditors, asserts that in the months before declaring bankruptcy, Norstan's made distributions of $14 million to the company shareholders and thereafter leveraged its own stock to transfer $53 million to those same shareholders.

"It is the view of unsecured creditors that these transfers were constructively fraudulent," said Cooley partner Ronald R. Sussman. In addition to Sussman, Cooley Partner Lawrence C. Gottlieb and Associates Jeff Cohen, Seth Van Aalten and Michael Klein advised on the matter.

Cooley is one of the top ten U.S. legal advisors on bankruptcy and restructuring matters, according to leading business publication The Deal. The firm represents secured lenders, official and unofficial creditors' committees, equity committees, employee and retiree committees, tort committees, investors in distressed situations, debtors, companies and governmental entities in the negotiation of complex reorganizations.

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