Bankruptcy Litigation

Bankruptcy Litigation | Wernette Heilman PLLC

Contested Claims – Nondischargeability Actions – Asset Recovery and more.

Bankruptcy court is not an arena in which to dabble. It is a world of its own – its own laws, judges, and rules. Wernette Heilman PLLC inhabits that world and speaks its language. Principal attorneys Mike Wernette and Ryan Heilman are expert bankruptcy litigators who have fought in bankruptcy court for large companies, small companies, and individuals, against powerful opponents such as the City of Detroit, union benefit plan trustees, Fortune 500 companies, New York private equity funds, insurance companies, and more — consistently delivering outstanding results.

Representative Matters

  • Defended a Detroit casino against breach of contract claims brought by the City of Detroit in the casino’s Chapter 11 case, with millions of dollars at stake. The City claimed a right to terminate the casino’s Development Agreement contract based on the casino’s alleged breaches of the Development Agreement. After a three-day bench trial against the City and its special counsel from Chicago, the court ruled in favor of Mr. Wernettes’s client, finding that the City had failed to follow certain requirements of the Development Agreement and therefore had no right to terminate it.
  • Recovered a $500,000 settlement for an automotive parts manufacturer in the New York bankruptcy case of a large Tier One auto supplier.  Mr. Wernette filed a claim in the Tier One’s bankruptcy case seeking priority payment of the client’s claim, which was based on a pricing dispute. The court scheduled the matter for trial. Mr. Wernette prepared his client’s case and appeared in New York prepared to go to trial.  The Tier One agreed to settle at the courthouse.

  • Defended an automotive tool maker in a $1.2 million “preference payment” suit in a Delaware bankruptcy case.  The client had held certain tooling hostage – withholding delivery of the tooling to its customer, a Tier One supplier, in order to extract payment for old invoices owed by the Tier One.  The Tier One filed bankruptcy a short time later, and the client was sued to recover the payment as a preference under the Bankruptcy Code.  The typical preference payment defenses were weak, but Mr. Wernette developed a theory that the $1.2 million was not a preference payment because it was never the Tier One’s money – rather, the Tier One was a mere conduit for money General Motors put up to secure delivery of the “hostage” tooling.  The client paid just 21 cents on the dollar to settle the case, despite being fully collectible and having held the tooling hostage on the eve of bankruptcy in order to obtain the payment at issue.

  • Stripped a $1.5 million construction lien from a client’s real estate development project through fast-track litigation in bankruptcy court.  After two days of taking evidence and argument, the court ruled that the construction lien was invalid, which paved the way for Mr. Wernette’s client to close on a sale of the project instead of losing it to foreclosure.

  • Defended nondischargeability actions against business owners under various subparts of section 523 and 727 of the Bankruptcy Code, against union benefit fund trustees and others who have attempted to pursue Chapter 7 debtors under ERISA, the ‘Builder’s Trust Fund’ Act, and other grounds. In one recent case, the owner of a defunct contracting company filed Chapter 7 and was pursued in a nondischargeability action by a group of union benefit fund trustees, seeking in excess of $200,000.00. After defeating some of the union trustees’ summary judgment motion grounds, and while other portions of the summary judgment motion remained pending, Mr. Wernette negotiated a settlement in which his client paid less than three cents on the dollar to have the nondischargeability action dismissed –substantially less than the cost to fight and win the action.

  • Won a bankruptcy court trial verdict of over $600,000 for a real estate developer against a general contractor and its president based on Michigan’s ‘Builder’s Trust Fund’ Act.