Jeffrey T. Testa

Chapter 7 trustee—Dairy company bankruptcy

Represent Chapter 7 Trustee in a bankruptcy proceeding (In re Golden Guernsey Dairy, LLC) in the US Bankruptcy Court for the District of Delaware. Represented the Trustee in the negotiation of and ultimate turn-key sale of the dairy processing company to Lifeway Foods, Inc., as well as in litigation against, among others, the debtor’s former officers and directors.

Chapter 7 trustee—Favorable settlement

Served as the court-appointed bankruptcy trustee of Zayat Stables, LLC, a thoroughbred horses entity that owned, among other horses, Triple Crown-winner American Pharoah. Obtained—in our role as court-appointed trustee and counsel to the trustee in this high-profile chapter 7 case involving the debtor owner—court approval of a multimillion global settlement with an investment entity, the individual trustee of the debtor owner, and the debtor’s family.

Chapter 11 trustee—Ponzi scheme matter

Represented the Chapter 11 Trustee in a massive Ponzi scheme case (In re Dwek) in which the debtor was revealed during the bankruptcy proceeding to be a government informant and ultimately sentenced to federal prison. Oversaw the organized liquidation of the real estate portfolio which included the negotiation and sale of residential, industrial and commercial properties across the nation, participated in presentations to, and negotiations with, the Creditor’s Committee, participated in meetings with various law enforcement agencies, and counseled on a wide range of litigation issues.

Health system—Sale of skilled nursing facility

Obtained court approval of the $11.7 million purchase by a hospital of a commercial medical facility in the In re Hajjar Business Holdings, LLC bankruptcy proceeding. After objecting to the debtor’s attempted sale to a third party, we negotiated with the debtor and a major national lender to become the stalking horse bidder and ultimately closed the transaction.

Local NJ Boy Scout councils—Bankruptcy advice

Represent three significant New Jersey Boy Scout local councils in the nationally publicized bankruptcy proceeding of the Boy Scouts of America pending in the US Bankruptcy Court for the District of Delaware. Helped the councils obtain protection afforded by a channeling injunction and third-party release that will allow the councils to continue their good works for the US youth.

Major health system—Receivership management guidance

Guided a major health system in connection with its appointment as the manager of a troubled nursing home that was in the national news during the pandemic. Operating under a receivership and overseeing the critical care of residents as operations discontinued, our client swiftly moved to depopulate the SNF. We worked in conjunction with state regulators after CMS eliminated funding, addressing issues including patient advocates and commercial lenders, along with petitioning the court as part of a process to best protect the quality of care for the residents, many of whom suffered from severe acuities. 

Pharmaceutical distributor, pharmacy company—Directors and officers trustee litigation

Obtained approval for a $1.57 million settlement for the Chapter 7 trustee of a pharmaceutical distributor and a pharmacy company against the former officers and directors in US Bankruptcy Court for the District of Delaware. The trustee asserted claims that the debtor entities’ former officers and directors violated the federal Anti-Kickback Statute, breached their fiduciary duties after entering into improvident agreements, and received significant fraudulent conveyances and preferences. 

Chapter 7 trustee—National student loan company bankruptcy

Represented the Chapter 7 Trustee in the US Bankruptcy Court for the District of Delaware bankruptcy (In re Student Finance Corp.) of national student loan company, which was revealed to be operating as a massive Ponzi scheme that defrauded creditors out of hundreds of millions of dollars and whose president was ultimately convicted of bankruptcy fraud. The representation included the sale of a loan portfolio and real property, preference and fraudulent conveyance litigation, and significant claim analysis prior to distribution to the allowed creditors.

Debtor—Academy bankruptcy

Represented the debtor in a Chapter 11 proceeding (In re New York Military Academy) in the US Bankruptcy Court for the Southern District of New York in which the historic academic academy was sold and saved from closure and in which a Chapter 11 plan was confirmed by the Honorable Cecilia G. Morris, Chief Bankruptcy Judge, Southern District of New York.

Court-appointed mediator—Bankruptcy advice

Represent the court appointed mediator in the Chapter 11 bankruptcy proceeding of the Diocese of Camden pending in the US Bankruptcy Court for the District of New Jersey. We are advising the mediator on both bankruptcy and insurance issues in this complex case.

US Bankruptcy Trustee—Sale negotiation

Represent the bankruptcy trustee in a matter before the US Bankruptcy Court for the District of Delaware of a large fabricator that operated at a Washington port, including having defeated efforts to change venue to Washington State. After negotiating an asset purchase agreement with a buyer company, the Trustee and his counsel were able to finalize a global settlement with the port, the lender, the buyer, and a debtor affiliate moments before the commencement of a contested sale hearing for the debtor’s assets, which resulted in the entry of a sale order. The Trustee also obtained an order approving a settlement with the debtor’s former officers and directors over breach of fiduciary duty claims.

US Bankruptcy Trustee—Litigation, investigation

Represent the Trustee of a former manufacturer and supplier of video surveillance products and services. We are assisting the Trustee with the investigation and litigation against numerous entities who received preferential and fraudulent transfers and in accessing potential breach of fiduciary duty claims.

US Bankruptcy Trustee—Litigation

Represent a Delaware bankruptcy Trustee in a contested bankruptcy proceeding of a California oil and gas company. Working in cooperation with the bankruptcy trustee of a parallel proceeding, we obtained court approval of a global $12 million settlement package against the debtor’s former officers and directors. The settlement also resolved a class action litigation that was pending in the US District Court for the District of Northern California, which was filed on behalf of investors against the former officers and directors.

US Bankruptcy Trustee—Sale of liquor license, assets

Obtained approval of the sale of a liquor license and all the assets of a Paterson, New Jersey, liquor store from the US Bankruptcy Court for the District of New Jersey.

US Bankruptcy Trustee—Third Circuit court of appeals win

Obtained a favorable ruling for the bankruptcy trustee of a national provider of claims management services to the insured and self-insured market from the Third Circuit Court of Appeals, upholding a decision by the US District Court for the District of Delaware that the bankruptcy court did not err in granting a settlement agreement between the trustee and the former owners and chief executive offices of the debtor after a contested settlement approval hearing.

Court-appointed examiner—Music producer matter

Represented the court appointed examiner (In re Robert Fusari) of nationally recognized music producer. Assisted in negotiations pursuant to which the acrimonious proceeding was resolved.

Chapter 7 trustee—Wireless network bankruptcy

Represent the Chapter 7 Trustee (In re Powerwave Technologies, Inc.) of an international wireless network maker, including having represented the Trustee in the sale of intellectual property and in mediation proceedings against the former directors and officers resulting in a significant settlement for the estate.

Chapter 7 trustee—Bankruptcy proceeding

Represented the Chapter 7 Trustee in a bankruptcy proceeding (In re Shan N. Nagendra) of an individual debtor. The representation included the sale of property, resolution of claims with the New Jersey Division of Taxation, and settlement with the Debtor. 

Chapter 7 trustee—Delaware bankruptcy

Represent the Chapter 7 Trustee in a bankruptcy proceeding (In re Tengion, Inc.) of a research and regenerative medical company in the US Bankruptcy Court for the District of Delaware. The representation has included the turn-key sale of debtor entity, including intellectual property and delicate biological samples, and the waiver of more than $23 million in secured claims. 

Various clients—Counsel to Assignee, Receiver work

Other notable representations include serving as counsel to Assignee for the Benefit of Creditors of Integrated Packaging, Inc. and Sixth Avenue Electronics City, Inc. and the Receiver of T. Fiore Demolition, Inc. and T. Fiore Recycling Corp.

Superior Court of New Jersey—Settlement of long-neglected parcel of land

Acting as the counsel to the court-appointed statutory receiver, obtained an Order approving a settlement agreement authorizing the sale of a 10-year-neglected, eight-acre parcel of land in Newark, New Jersey, free and clear of liens, claims and encumbrances, with all such liens attaching to the proceeds for later resolution and adjustment amongst the creditors. Assisted the statutory receiver in negotiating the settlement within 18 months of appointment to facilitate the site’s environmental closure and remediation.