Promote Your Attorney Profile on Law.net - Get Found / Earn More!
The Ins and Outs of Bankruptcy Law
The Ins and Outs of Bankruptcy Law
University at Buffalo Law School Dean Steps Down Amidst Allegations of Perjury
University at Buffalo Law School Dean Steps Down Amidst Allegations of...
It’s Not About the Nail
It’s Not About the Nail
Knowing What to Ask and When to Ask It
Knowing What to Ask and When to Ask It
Job Listings

Former CEO of Radnor Sues Skadden

Michael Kennedy, the former CEO of defunct packaging firm Radnor Holdings Corp has sued Skadden Arps and the law firm’s client, the hedge fund Tennenbaum, as well as some other legal and financial advisers in the U.S. Bankruptcy Court in Wilmington, Delaware.

Michael Kennedy alleges that Skadden had colluded with Tennenbaum Capital Partners to give the firm a $100 million windfall in the sale of Radnor to Tennenbaum in 2006. Kennedy has made a claim for $75 million and voiding of the sale of Radnor.

The lawsuit includes at least 10 claims including conspiracy, malpractice, breach of contract and fraud.

Radnor, which used to make food packaging and chemical products for big food chains declared itself bankrupt in the wake of Hurricane Katrina leading to shortages in raw materials and natural gas. The company was sold to Tennenbaum which already owned about $95 million in bonds in the company.

What

 job title, keywords

Where

 city, state, zip



Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!


However, according to Kennedy, before declaring bankruptcy he had repeatedly asked Skadden to advise the company on an asset sale and out of-court restructuring. However, Skadden and Tennenbaum rejected Kennedy’s proposals to restructure outside the court through equity investments and asset sales.

Skadden also advised Radnor that a bankruptcy sale to Tennenbaum was its best option.

Apparently, Kennedy was unaware that Tennenbaum had paid Skadden about $4 million in 2004-5 for legal services related to raising funds that Tennenbaum then invested in Radnor.

And he also did not know at the time that some Skadden partners including one involved in the Radnor matter had invested their personal moneys in Tennenbaum through an investment vehicle controlled by Skadden.

The eventual sale of Radnor to Tennenbaum resulted in the hedge fund gaining about $100 million, while at the same time Kennedy’s family stake in Radnor was wiped out.

The real story, of course, would be unearthed if the lawsuit proceeds to the stage of discovery.

The case is Michael T. Kennedy v. Skadden Arps Slate Meagher & Flom, U.S. Bankruptcy Court, District of Delaware, No. 12-51308.

Former CEO of Radnor Sues Skadden by

Tagged: , , , ,

Posted by on January 7, 2013. Filed under Home. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

 

 

Job of the Day
Insurance Defense Associate
USA-TX-Dallas

Immediate opportunity for two Insurance Defense Attorneys to join an established Dallas law firm.  One position is for a mid-level associate requiring 3 to 5 years expereince, and the other is ju...