Representing Landlords, Creditors and Buyers

St. James Law works with all of the different constituencies in bankruptcy and insolvency cases, including:


Counseling and Representing Landlords

Widely known as an expert on the legal issues faced by the landlords of insolvent tenants, Michael St. James provides counsel and advice to landlords and real-estate attorneys seeking to evaluate and address prospective tenant insolvency issues during the lease-formation process.

St. James’ particular expertise led him to be selected as landlord’s counsel in a number of significant bankruptcy cases, including those of Webvan, Chevys, Loehmann’s and Solyndra. Although he has actively litigated issues for landlords in bankruptcy courts and on appeal, including appeals prosecuted in the Ninth Circuit Court of Appeals, his usual approach is to attempt to avoid litigation entirely in order to obtain a cost-effective business solution, generally either by quickly regaining the premises so they can be re-let, or by implementing mechanisms to ensure that the lease will be paid in a timely manner.

St. James has published numerous articles dealing with bankruptcy and insolvency issues important to landlords.

For example, in “Landlord Beware,” St. James argued that, unless specifically addressed and waived in the lease, an insolvent tenant terminating a lease might nonetheless be able to require the landlord to refund its entire security deposit. Several years later, a California Court of Appeals adopted St. James’ analysis — crediting that article — and required a landlord to refund a security deposit to its tenant’s assignee for the benefit of creditors.

Similarly, St. James has written extensively on insolvency issues associated with landlord security deposits and letters of credit, recently providing an analysis of the factors that should motivate a landlord to select one over the other in an article titled, “What’s a Landlord to Do? Choosing Between Security Deposits and Letters of Credit Based on Tenant Insolvency Concerns,” published in the Real Property Journal of the California State Bar.


Advancing Creditors’ Strategic Objectives

St. James counsels and advises creditors about strategies to advance their objectives in response to a bankruptcy filing. For example, in some cases, the creditor’s interests may be best served by leveraging its efforts through participation in an Official Creditors Committee. In other cases, seeking the appointment of a trustee or an examiner, or moving to dismiss the case, may best advance the creditor’s interest.

St. James understands the unique rights and concerns of franchisors and licensors, and formulates strategies to preserve and enforce their rights while a bankruptcy case is pending. St. James has lectured on the impact of bankruptcy on intellectual property licenses and is sensitive to the strategic concerns of the license counter-parties regarding the operations of a bankruptcy case. St. James’ background and familiarity with the Chapter 11 process enables him to formulate creative strategies to steer a case toward his client’s objectives.


Representing Creditors Involved in Bankruptcy Litigation

Michael St. James represents creditors in a variety of bankruptcy contexts, including bankruptcy litigation.

Creditors often find themselves required to respond to bankruptcy litigation, sometimes defending the merits of their claims or liens, but often in response to “avoidance actions” or other challenges brought by the bankruptcy estate, which seek to recover “preferences” or fraudulent transfer payments previously received by the creditors. St. James has successfully represented creditor defendants in the full spectrum of these lawsuits in bankruptcy courts throughout the country. His reputation for a willingness to litigate matters through trial and appeals often enables him to negotiate favorable settlements early in the litigation process.

At one extreme, St. James aggressively defended a multi-million-dollar challenge brought against his client by The Sharper Image Corp. in the Delaware Bankruptcy Court. At the opposite extreme, he represents a national medical-supply company responding to preference claims brought in hospital bankruptcy cases throughout the country, attempting to administer them at the lowest aggregate cost, after considering both settlement payments and attorneys’ fees.

In the bankruptcy of national law firm Heller Ehrman, St. James represented 17 vested retirees — individuals who had been promised pensions for life when they were the leading members of the firm in the 1970s and 1980s. The vested retirees were a significant constituency in the bankruptcy case, and St. James assisted them in placing a representative on the official creditors committee. In addition to advancing their interests in the bankruptcy proceedings, St. James defended challenges to their claims in litigation, mediation and the general administration of the case.


Counseling and Representing Buyers of Insolvent Businesses

Often, a sale represents the best exit strategy for an insolvent business. Michael St. James has represented buyers and acquirers in numerous contexts. In pre-arranged consensual sales, St. James has counseled buyers regarding the optimal vehicle for sale (e.g., bankruptcy case, assignment for the benefit of creditors, etc.), as well as the management and administration of the sale process so as to minimize risks and uncertainties. In other cases, he has represented competitors who decided to pursue an acquisition upon learning of the bankruptcy, in some cases accomplishing the acquisition over the debtor’s vigorous opposition.