Transaction of the Year
Company revenue at the onset of the turnaround of between $50 million and $300 million
Contessa Premium Foods Inc.
Prior to its restructuring, Contessa
was a leading provider of premium
farm-raised shrimp, convenience
meals, and other frozen food products
worldwide. Due to the economic
recession and increasing competition,
the company experienced a sharp
decline in demand for its products
and filed Chapter 11 in January 2011.
Kelly Drye & Warren LLP was
retained as restructuring counsel,
and Scouler & Company LLC served
as financial advisors. Arent Fox LLP
was selected as counsel to the official
committee of unsecured creditors,
and FTI Consulting Inc. acted as the
committee’s financial advisor.
Section 363 of the Bankruptcy Code
represented the best option to preserve
its businesses and its employees,
and the first step toward maximizing
recoveries for its creditors. The process
started with Scouler managing a
serious liquidity crisis and profitable
business lines. Kelley Drye then
worked with Arent Fox to develop a
collaborative process to manage the
diverse group of interested stakeholders.
By choosing open communication
over brinkmanship, the firms enabled
the various factions to work together,
focusing on preserving going concern
value and jobs rather than litigation.
The intense marketing campaign
produced three qualified bidders.
Sun Capital Partners Inc., the
stalking horse, ultimately prevailed,
and its winning bid satisfied all
secured creditors and resulted in
an anticipated 50 to 65 percent
distribution to unsecured creditors.
solicitation of more than 145 operating,
strategic, and financial buyers.
The last major obstacle was overcome
when Kelly Drye and Arent Fox worked
to settle a dispute with Contessa’s
president and CEO over ownership
of Contessa’s intellectual property
necessary to run the various businesses.
The case commenced amid deep
mistrust between Contessa and
the committee over management
and various restructuring options.
Further, other interested stakeholders,
a “key creditor group,” had largely
disparate and often adversarial
interests, and the case quickly
threatened to spin out of control.
The professionals determined that
a sale of Contessa’s assets under
The professionals resolved many
creditor concerns by agreeing that
an investment banker would be
jointly selected by the debtor and
committee with input from other key
creditors, that there would be complete
transparency in the sale process, and
that bids would also be evaluated
jointly. This process resulted in the
selection of Imperial Capital LLC. The
sale of Contessa to potential buyers
involved Scouler and Imperial in
two distinct yet symbiotic marketing
campaigns, which resulted in the
The next challenge was to beat the
projected recovery to unsecured
claimants. Kelley Drye developed a plan
of liquidation incorporating a claims
settlement procedure focused on
general unsecured, secured, and insider
claims. The settlement procedure wildly
exceeded expectations and, combined
with the claims reconciliation
process and other features, permitted
all allowed unsecured creditors to
receive a 100 percent recovery.
From left to right: TMA Chairman
Mark S. Indelicato; Craig A. Wolfe,
Kelley Drye & Warren LLP; Dan Scouler
Sr., Scouler & Company, LLC; Mette
H. Kurth, Arent Fox LLP; and TMA
President Ronald R. Sussman.
Not pictured: Marc Bilbao,
Imperial Capital, LLC; and Matthew