Washington, DC (September 27, 2013) – Venable lawyers prevailed earlier this week on appeal in the United States District Court for the Northern District of Illinois Eastern Division on behalf of the firm’s client, FBR Capital Markets & Co. The firm secured reversal of a motion for summary judgment that the Bankruptcy Court had entered against FBR’s pre-approved fee in a Chapter 11 bankruptcy involving River Road Hotel Partners, LLC.
FBR had been retained by the Debtor to pursue restructuring alternatives for the Intercontinental Hotel at O’Hare Airport. When a restructuring was later proposed by the lenders and approved by the Court, FBR petitioned for an award of its pre-approved fees. The plan transferee Bletchley Hotel Partners – designated by the lenders to take title of the hotel and administer remaining bankruptcy claims – objected to FBR’s fee application. Although FBR performed its duties and the parties had agreed in advance to FBR’s compensation, which was pre-approved under Section 328(a) of the Bankruptcy Code, the Plan Transferee objected to FBR’s fee application because the Debtor’s ultimate restructuring was not accomplished as a result of the advisor’s efforts.
Instead, Bletchley argued that FBR’s retention agreement and the court order approving it were unclear, and that parol evidence supported denying FBR the fee in the event of a restructuring based on a third party’s plan.
After discovery on the fee dispute, FBR moved for summary judgment and moved in limine to preclude Bletchley’s parol evidence. In interpreting the Agreement, the Bankruptcy Court found the Retention Order ambiguous and relied on a challenged Declaration to grant summary judgment sua sponte for Bletchley. The Bankruptcy Court then denied FBR’s motion in limine as moot. This appeal followed. On appeal, the Northern District of Illinois reversed summary judgment for Bletchley and remanded the case for further proceedings consistent with its opinion.
The Venable team was led by Andrew Currie and Tom Gilbertsen of the firm’s Washington, DC office.
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