Paul Keenan Jr. and John Dodd, Greenberg Traurig

Paul J. Keenan Jr. and John R. Dodd

Greenberg Traurig

Greenberg Traurig shareholder Paul Keenan and of counsel John Dodd encountered unforeseen challenges — from financing to weather — representing Optima Specialty Steel and subsidiaries in their Chapter 11 bankruptcy cases in Delaware.

Miami-based Optima was a leading national manufacturer of specialty steel products with annual revenue of $600 million and more than 900 employees at seven factories in five states.

With the company's scope and more than 1,000 creditors, the case was considered one of the largest bankruptcies in 2017 for a Florida-based company. At risk were a substantial number of jobs and investments in an important industry.

Optima had $172 million in secured notes, $88 million in unsecured notes and $30 million in trade debt for aggregate debt of $290 million. The attorneys created a restructuring plan for the company in a process that was highly contentious among shareholders, the creditor's committee and noteholders who wanted to convert their debt to equity and take over the company.

Greenberg Traurig prevailed in preventing a takeover of the company's Chapter 11 case. The attorneys obtained court approval of a restructuring plan in June 2017 calling for an existing shareholder to make a $200 million equity contribution and $130 million in exit debt financing from GSO Blackstone.

But over Labor Day weekend, the attorneys learned the shareholder wouldn't be able to close on the $200 million segment.

“We had to act fast because the company's liquidity was running low,” Keenan remembers. “We had just spent the last six months negotiating a plan with the shareholder, and now we had to negotiate a new plan with the noteholders in just a few weeks.”

Then Hurricane Irma formed, becoming a Category 5 storm at sea and threatening South Florida.

“I put my family in the hotel connected to our Miami office building and worked through the hurricane at our office,” Keenan said. “John evacuated to Vero Beach and worked through the storm from there. We pulled in help from our New York office.”

By the time a much weaker Hurricane Irma blew through South Florida, the attorneys had negotiated a new reorganization plan that would convert unsecured notes to $87.5 million in equity and provide for $240 million in exit financing.

The plan was approved by the court in October 2017, changing Optima into Specialty Steel Works. The jobs were saved, and creditors were paid 100 cents on the dollar including interest.

“It is very gratifying to see a result like this after months of litigation and negotiations,” Keenan said. “It is well worth the effort when we see a company's value and jobs preserved and successfully emerge from bankruptcy.”