Selected Industry Examples


Healthcare is a highly-regulated and complex industry in which we have specific and extensive experience. In one example, we filed a highly-structured Chapter 7 bankruptcy case for a California medical clinic in which we strategically arranged for the purchase of “tail” medical malpractice insurance coverage for the doctors in a way that protected them against fraudulent transfer and preference claims. Thereafter, we took advantage of a new law, namely Bankruptcy Code Section 351, which provides for the orderly distribution and disposition of patient records. Although the Chapter 7 trustee resisted the new law, we were able to compel the trustee to properly distribute the patient records.Among our former clients is a residential care facility for the elderly (RCFE) that was on the brink of foreclosure. We successfully reorganized the RCFE, first by preventing the foreclosure in a Chapter 11 bankruptcy. The facilities continued to operate without interruption with no loss of jobs and no disruption to patients. It is important to note that RCFE patients experience a high mortality rate when forced to move. Second, we successfully sued several third parties, including taxing authorities, to clear title to the underlying real property. Finally, we obtained court approval of approximately $1.3 million in new financing and brought the RCFE out of bankruptcy.For another RCFE operated as a non-profit, in the midst of complex litigation, we started by connecting the RCFE with a highly competent interim director to manage operations. Thereafter, we assisted the RCFE in selling its facilities while still operating and preparing to transform the non-profit into a grant-making foundation for the elderly. All the while, we made sure to provide adequate notice of possible termination and options for patients and their families. This project involved the intersection of three highly-technical areas: specifically, RCFE’s, non-profits (including working with the Attorney General) and insolvency. This case is emblematic of the sorts of problems and solutions to which we are well suited.Partner Iain A. Macdonald has been appointed Chapter 11 bankruptcy trustee (an independent fiduciary) to operate an optometry clinic. Mr. Macdonald successfully reorganized the business under a plan providing for payment of all creditors in full. We have also served as counsel in successfully reorganizing dentistry practices and other health-related businesses.


Hotels and hospitality-related business require special expertise in handling commercial litigation and insolvency. In particular, hotels may be subject to the appointment of a rents-and-profits receiver. Moreover, in bankruptcy, a hotel may be classified as a “single asset real estate debtor” and subject to special, onerous rules unless a valid exception can be established, such as the operation of a restaurant or gift shop generating income other than rent.Macdonald Fernandez LLP has significant experience in hospitality matters. In one example, we successfully reorganized a $20 million hotel in Riverside, California. Specifically, be brought the hotel into a strategic Chapter 11 bankruptcy case prior to an imminent shut-down. The hotel remained open without disruption while we handled issues ranging from municipal bonds, disputed easements, assumption of the franchise agreement and sale options. We were also able to shield the hotel from the onerous single asset real estate rules discussed above. We successfully obtained bankruptcy court confirmation of a Chapter 11 plan of reorganization that modifies the terms of the loan and resolves all other issues. Now the case is closed and the hotel is operating profitably.

Manufacturing & Construction

Manufacturing and construction are at the heart of business and trade. Keeping manufacturers operating and delivering parts, equipment and goods into the stream of commerce, as well as constructing and maintaining the facilities through which commerce moves, are vital to the functioning of our local, national and global economies. We are proud to have represented several manufacturers and construction companies.In one example, we represented a California manufacturer of commercial-grade ovens and other kitchen equipment in defending against a preference lawsuit brought in connection with a bankruptcy case filed by a customer in Delaware. We were able to obtain dismissal of the action in the first few days of the case.In another example, we represented a large road builder as creditor in the New York bankruptcy case of a national shopping mall developer. Our client had completed construction of all roads and utility trenches for a shopping mall near Sacramento, California, but the debtor filed bankruptcy before payment was received. Through litigation and negotiation with the debtor, we were able to obtain payment of our client’s claim in full.

Mortgage Funds & Hedge Funds

Mortgage funds and hedge funds are crucial in moving capital to where it can do the most good, but despite extensive diligence, some investments are bound to fail. When too many investments are slow to pay off or fail, the fund itself may need to be reorganized. We have a solid track record assisting mortgage funds and hedge funds in reforming or liquidating distressed assets.In one example, we represented a mortgage fund with a portfolio of liens against office buildings, development property and other assets throughout California as well as real property owned after foreclosure (real estate owned or “REO”). We assisted the fund in maximizing the value of its distressed assets, including by negotiating forbearance agreements with senior lenders, liquidating REO and other necessary steps.In another example, we represented certain investors in bringing a fraudulent mortgage fund into an involuntary bankruptcy case, as part of which the investors’ legal fees were later reimbursed by the fund. Thereafter, we represented the official committee of unsecured creditors, on whose behalf we worked to obtain the appointment of an independent trustee to liquidate assets and make distributions to creditors. We assisted the trustee in marketing and selling a variety of assets throughout the united states, including loan portfolios and REO, often amid complex circumstances such as rights of first refusal, condemnation proceedings, pending judicial foreclosures and litigation.


Nonprofits face special rules and restrictions, including charitable trust issues, donor gifts and pledges, trust accounting, monitoring by the California Attorney General and other issues. We have been honored to serve several nonprofits in overcoming challenging legal issues.In one example, we assisted a YMCA with an operating gymnasium, several plots of undeveloped land, several leased facilities and significant debt. Although the YMCA was almost out of operating capital, we were able to prevent a shut-down by filing a Chapter 11 bankruptcy case and arranging for a sale of the operating facilities to a nearby YMCA. The facilities experienced no disruption, and the community retained the YMCA as a valuable asset.In another example, we represented a residential care facility for the elderly (RCFE) that was operated as a nonprofit. The facility was in the midst of complex litigation. Working to achieve a reorganization out of court, we assisted in arranging for the sale of the operating facilities and paved the way for the nonprofit to use the proceeds to make grants for elderly people in lieu of providing services in-kind. This involved the intersection of two highly-regulated areas, specifically RCFE’s and non-profits.

Real Estate

Real estate is a significant source of recovery for creditors to seek and an important source of wealth for debtors to protect. Real estate presents numerous areas where legal issues may call for resolution, such as deeds of trust, judgment liens, leases, tenant issues, foreclosure, rents-and-profits receivership, estate planning, real property taxes, easements, utility liens and other issues. We bring our experience working with real estate developers, hotels, office buildings, apartment complexes, receivers and homeowners to bear for our clients.For example, we reorganized both the business and personal financial affairs of an elderly couple who own a San Francisco apartment building. Specifically, in the context of a Chapter 11 bankruptcy case, we sued their largest creditor for usury and, after a string of court victories, we settled the matter favorably.In another example, we reorganized a $20 million hotel in Riverside, California, in a Chapter 11 bankruptcy case. The hotel remained open without disruption while we resolved issues ranging from municipal bonds, easements, the franchise agreement and sale options. We were also able to shield the hotel from the Bankruptcy Code’s onerous “single asset real estate” rules.
Other examples of our clients include the owner of an office high rise in Los Angeles, California, shopping-mall owners, RadioShack landlords, commercial tenants and several real estate developers.

Restaurants & Retail

For restaurants and retail stores and chains, the ability to continue sales, services and deliveries uninterrupted through legal challenges is critical. We are honored to have assisted several restaurants and retail establishments, and we are familiar with the issues they often face, including customer rewards card programs, factoring arrangements and other asset-based financing, inventory and borrowing-base issues, distribution channels, franchise agreements, equipment leases, personal guarantees and other issues.In one example, we represented a famous downtown San Francisco restaurant in successfully reorganizing and remaining open without disruption. Although the issues were complex, including burdensome secured debt, competing rewards-card programs, disputed inventory and equipment valuations and a sale to the new general manager, we used a Chapter 11 bankruptcy case to achieve a significant reduction in debt that allowed the restaurant to open a new private-dining area and return to profitability.In another example, we successfully reorganized a Thai takeout restaurant in a shopping mall in Chapter 11 by reducing the restaurant’s debt and prosecuting and settling claims against third parties that had loaned funds to certain affiliates but obtained a guarantee from the restaurant. In a third example, we wound up and dissolved a restaurant out of court, achieving a smooth termination with minimal disruption to the owner.

Tech & Biotech

Key goals of technology and biotechnology companies include maximizing the value of distressed assets, such as problematic but valuable licenses, untested but promising intellectual property or a division or product that should be reformed or terminated. Another key goal is finality and a smooth transition allowing entrepreneurs and investors to move on to new projects with minimal disruption. We have represented technology and biotechnology companies in a variety of situations, including bankruptcy and litigation.Technology companies often require special handling and expertise, including the careful handling of issues surrounding assumption, assignment and rejection of intellectual property licenses; the orderly termination of burdensome contracts; negotiation, termination or transfer of leased facilities; perfection of liens against intellectual property; protection of trade secrets and methods; data privacy; recovery of claims against third parties and other issues.We bring our experience with high technology clients to bear. We have represented technology and biotechnology companies in and out of court, reorganizing in Chapter 11 bankruptcy, liquidating in Chapter 7 bankruptcy, winding up and dissolving out of court, proceeding with an assignments for the benefit of creditors (ABC’s), handling liens and licenses involving intellectual property, terminating development agreements and other matters.In one example, we successfully wound up and dissolved a technology company out of court. The company was incorporated in Delaware but doing business primarily in California with several lines of high-technology products, one in healthcare, another in 3D graphics and a third in social media. Dissolving out of court provided the entrepreneurs with the advantages of a smooth, low-profile process at minimal expense. We have also represented companies developing and selling technology-based marketing platforms, health aids, Bitcoin-based businesses, data centers and others.

We also assist other types of businesses with the intersection of technology and legal issues. A key issue for non-high-tech companies is protecting the company’s right to its data in an immediately available and usable form; if the data disappears or is inaccessible, the company can suffer significant delays and expense in moving forward. For example, we assisted a large grocery store in negotiating the termination of an e-commerce website development contract with terms protecting the store’s right to all customer data and content, allowing the store to transition to a new developer with no interruption.