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Paul H. Zumbro

Partner, Corporate

Paul H. Zumbro is a partner in Cravath’s Corporate Department and serves as the Head of the Firm’s Financial Restructuring & Reorganization practice. His practice focuses on restructuring transactions and related financings, both in and out of court, as well as bankruptcy M&A transactions. The 2017 edition of Chambers USA: America’s Leading Lawyers for Business reports Mr. Zumbro is “noted for his expertise across financing transactions, with a particular focus on distressed financings” and quotes a client as saying he is “a master of dealing with chaos” and can “impose order on chaos.” Others praise his “very detail‑oriented and creative approach to matters” (Chambers Global: The World’s Leading Lawyers for Business, 2017 edition).

Mr. Zumbro’s practice includes advising the Firm’s corporate and financial institution clients on bankruptcy issues and advising on creditor rights in a variety of contexts. He regularly represents agents and arrangers in debt restructurings and debtor‑in‑possession (DIP) financings. His debt restructuring experience also includes work in the fields of municipal and sovereign debt restructuring.

Mr. Zumbro also has extensive experience in non‑distressed leveraged finance, having represented the arranger banks in several multibillion‑dollar LBO financings, including for Freescale Semiconductor, Neiman Marcus and Warner Chilcott. He also acts on the borrower side, representing sponsors and borrowers in acquisition and non‑acquisition related credit facilities.

Representative matters include representing:

Bankruptcy M&A

  • Stage Stores, Inc., through its operating subsidiary Specialty Retailers, Inc., in connection with its acquisition of select assets of Gordmans Stores, Inc. through a Bankruptcy Code section 363 transaction. Under the terms of the transaction, the Stage Store subsidiary will, subject to exceptions in the purchase agreement, acquire a minimum of 50 Gordmans store leases, with rights to assume leases for an additional seven stores and a distribution center, and, on April 7, 2017, the Stage Store subsidiary acquired all of Gordmans’ inventory, furniture, fixtures, equipment and other assets at the 57 store locations and the distribution center as well as trademarks and other intellectual property of Gordmans.
  • Brookfield Asset Management Inc. in connection with the bankruptcy aspects of its US$1.3 billion acquisition of TerraForm Global, Inc. and its US$3.8 billion acquisition of a controlling stake in and assumption of sponsorship of TerraForm Power, Inc. SunEdison, Inc. and certain of its subsidiaries filed for Chapter 11 bankruptcy in April 2016, in the largest U.S. bankruptcy filing of the year. TerraForm Global and TerraForm Power, the publicly‑traded yieldcos of SunEdison, have entered into settlement agreements with SunEdison and are not debtors in the SunEdison bankruptcy case.
  • Stanley Black & Decker, Inc. in connection with its acquisition of the Craftsman brand from Sears Holdings Corporation. The transaction provides Stanley Black & Decker with the rights to develop, manufacture and sell Craftsman‑branded products in non‑Sears Holdings retail, industrial and online sales channels across the U.S. and in other countries. Mr. Zumbro advised Stanley Black & Decker on bankruptcy structuring matters related to the transaction, including with respect to intellectual property licensing issues. Following the initial signing of the transaction, Mr. Zumbro has continued to advise Stanley Black & Decker in connection with issues related to financial disclosures made by Sears Holdings, as well as with respect to the filing for insolvency protection by Sears Canada under the Canadian Companies’ Creditors Arrangement Act.
  • Barnes & Noble, Inc. in connection with its acquisition of substantially all intellectual property and related assets from Borders Group, Inc. in a Bankruptcy Code section 363 transaction. This transaction involved both complex worldwide IP licensing issues and navigation of the Bankruptcy Code’s special provisions relating to the sale of “personally identifiable information” and related consumer privacy ombudsman provisions (including successfully addressing the privacy concerns of the New York Attorney General and the Federal Trade Commission through court‑approved “opt out” procedures).

Sovereign Debt Restructuring

  • The Republic of Argentina in connection with its historic sovereign debt litigation settlement and restructuring. Mr. Zumbro acted as special counsel to Argentina in connection with its US$16.5 billion bond offering, the largest emerging market debt issuance at the time. Working closely with the Cravath litigation team, Mr. Zumbro helped coordinate the complex settlement payment mechanics among the Republic, the bond underwriters and the lead settling plaintiffs, as well as the bond offering and the court processes, in a manner that minimized execution risk for the Republic in its important return to the international capital markets.

Other Non‑Financing Bankruptcy Matters

  • The independent monitor appointed to oversee the recall and related matters by the National Highway Traffic Safety Administration (the NHTSA Monitor) and the independent compliance monitor appointed by the Department of Justice under the Plea Agreement with Takata (the DOJ Monitor), in connection with Takata’s Chapter 11 proceedings and related Japanese insolvency proceedings.
  • YPF S.A., the Argentine state‑owned oil and gas company and parent company of Maxus Energy Corp., before the U.S. Bankruptcy Court for the District of Delaware following an amendment to Maxus’s proposed Chapter 11 plan of confirmation that anticipates post‑confirmation litigation claims will be asserted against YPF regarding YPF’s alter ego liability for Maxus’s liabilities.
  • A major financial institution in connection with a matter relating to a significant amount of post‑petition interest on claims arising from terminated ISDA swaps in the Lehman Brothers U.S. bankruptcy case and the related U.K. insolvency administration of Lehman Brothers International (Europe). The matter involved complex cross‑border legal issues relating to statutory surplus entitlements, including issues relating to ISDA default rate calculations and questions regarding applicability of statutory versus contractual interest rates. The resolution of the matter was reported to the Joint Administrator of Lehman Brothers International (Europe) (in administration) on August 2, 2017.

DIP Financing, Exit Financing and Recapitalizations

  • Credit Suisse as lender, collateral agent and administrative agent of the senior secured asset‑based revolving credit facility provided to UCI International LLC and certain of its affiliates in connection with financing and court matters relating to UCI’s Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. UCI, a subsidiary of Rank Group, is a motor vehicle parts and systems business with approximately US$469 million in funded indebtedness at the time of its bankruptcy filing, including approximately US$69 million in drawn borrowings under its ABL facility, under which the two lenders were Credit Suisse AG, Cayman Islands Branch and an affiliate of Rank Group. Despite various proposals by debtors that would have led to Credit Suisse being impaired on its debt and subject to post‑confirmation litigation, UCI and its affiliated debtors emerged from Chapter 11 in December 2016, with lenders under the ABL facility receiving a hundred cents on the dollar repayment and Credit Suisse receiving litigation releases.
  • Credit Suisse since 2014 in connection with a US$700 million term loan credit facility provided to YRC Worldwide, Inc. as part of a successful comprehensive recapitalization transaction. Following the initial funding of the term loan facility, Mr. Zumbro has continued to advise Credit Suisse, including as arranger for two successful covenant relief amendments obtained for YRC (most recently in January 2017), as well as an important US$600 million refinancing/maturity extension transaction in July 2017. This maturity extension of the term loan facility was an important liability management transaction for YRC as it allowed YRC to focus on addressing other upcoming maturities and avoid a “springing” maturity of its asset‑based loan facility.
  • Credit Suisse in connection with a US$370 million credit facility provided to Koosharem, LLC (d/b/a Select Staffing) to finance its exit from a “prepack” bankruptcy proceeding. Mr. Zumbro also represented Credit Suisse as agent under a US$50 million DIP facility to finance Select Staffing’s operations during the bankruptcy proceeding. Most recently, he represented Credit Suisse in connection with a US$255 million incremental term loan B facility provided to Select Staffing to finance its acquisition of EmployBridge, another staffing service company.

Mr. Zumbro is a member of the American Bankruptcy Institute, the International Bar Association (IBA) and the IBA’s Banking Law and Insolvency, Restructuring and Creditors’ Rights Committees. He co‑authored the United States section in the Practical Law Company’s Cross‑Border Finance Handbook (2006/07; 2008/09 and 2011) and has authored several pieces relating to DIP financings. Mr. Zumbro recently participated in the American Bankruptcy Institute’s 2016 “Winter Leadership Conference” and spoke on a panel entitled “DIP Best Practices.”

Mr. Zumbro has been recognized as a leading lawyer in banking and finance by Chambers USA: America’s Leadings Lawyers for Business in 2016 and 2017; Chambers Global: The World’s Leading Lawyers for Business in 2017; The Legal 500 in 2009, 2012, 2013 and 2016; and IFLR1000 from 2013 through 2018. He has also been cited by The Legal 500 for his skill in corporate restructuring from 2010 through 2012. In 2017, Mr. Zumbro was named by Lawdragon as one of “500 Leading Lawyers in America.”

Mr. Zumbro was born in Bethesda, Maryland. He received a B.A. cum laude and with Distinction in the Major from Yale College in 1992 and a J.D. from Columbia Law School in 1997, where he was a Stone Scholar. Mr. Zumbro joined Cravath in 1997 and became a partner in 2005.

Mr. Zumbro can be reached by phone at +1‑212‑474‑1036 or by email at pzumbro@cravath.com.

Mr. Zumbro is admitted only in New York.

Contact
+1 (212) 474-1036
+1 (212) 474-3700