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Kaye Scholer Represents JHT in "Whirlwind" Chapter 11 Reorganization

October 24, 2008

On October 24, 2008, JHT Holdings and its affiliates (collectively, "JHT"), the leading transporter of new and used medium- and heavy- duty trucks in North America, consummated a joint plan of reorganization under chapter 11 of the Bankruptcy Code. The announcement follows confirmation of the plan earlier that month by Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware. The plan was confirmed less than four months after the case was filed, a testament to the hard work and flexibility of JHT, its lenders, its customers, its employees, its unions, the official committee of unsecured creditors (the "Committee") and the various professionals. Kaye Scholer represented JHT in all facets of the restructuring and coordinated with co-counsel in Delaware and Canada. The speed with which the restructuring was completed is due in large part to extensive prefiling negotiations with JHT's lenders, lead by G.E. Capital, and a group of distressed investors consisting of Highland Capital and two of JHT's equity sponsors, D.B. Zwirn and Spectrum Investments. Those prefiling discussions resulted in a plan, disclosure statement, lockup agreement, DIP financing, and terms for exit financing and corporate governance, all filed in the first few days of the case. The case, while short, was highly contentious, and the plan was initially opposed by the Committee and JHT's largest unsecured creditor, Liberty Mutual Insurance Group, both of which ultimately agreed to settlements favorable to JHT that cleared the way for confirmation. Under the plan, the lenders converted roughly half of their secured debt to equity, as a result of which Highland, DB Zwirn and Spectrum now own 70% of the reorganized company's stock and the lender group lead by G.E. Capital owns the remaining 30%. Unsecured creditors, who were not entitled to a recovery, received a modest dividend principally in exchange for releases in favor of management and certain related parties.

D. Tyler Nurnberg and Michael Solow, partners in the Business Reorganization and Creditors' Rights Group, lead the bankruptcy team; Alan Glantz, counsel in the Corporate & Finance Group, lead the finance team; and Anthony G. Stamato, partner in the Litigation Group, provided trial and insurance experience critical to the reorganization.

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