By Pat Siciliano, STA International
Q: Who is Klestadt Winters Jureller Southard and Stevens LLP (“KWJSS”)?
A: KWJSS is a boutique law firm with offices in New York City and Garden City, New York with the capacity to handle matters in bankruptcy and corporate restructuring, commercial litigation and business transactions in New York and many other jurisdictions throughout the country. KWJSS is comprised of a team of 11 attorneys with diverse professional backgrounds and experience who work collaboratively to meet the needs of their varied client base and assorted matters.
Q: Tell us about the KWJSS Team.
A: The Starting Lineup:
Tracy Klestadt (“The Founder”)
After many years at a large, national law firm, Mr. Klestadt followed his entrepreneurial vision to start his own firm in 1995. Now in its 28th year, KWJSS has expanded in size, presence in the industry and quality of its legal representation in a breadth of clients, industries, and matters. Under Mr. Klestadt’s leadership, KWJSS has become one of the most reputable boutique bankruptcy and restructuring firms in the New York area and beyond.
More specifically, Mr. Klestadt has contributed to the firm’s success by capably representing a wide variety of clients in some of the country’s most prominent bankruptcy proceedings, workouts, corporate reorganizations, and other litigation matters.
Ian Winters (“The Closer”)
Mr. Winters joined Mr. Klestadt in 1996 to start building out KWJSS’s team. Although Mr. Winters’ background is rooted in bankruptcy and restructuring, the focus of his practice has developed into one that is more transactional in nature, serving clients ranging from large multi-national corporations to family-run businesses. Mr. Winters works closely with his clients to help plan and execute commercial business transactions consistent with their goals and business strategies. Specifically, Mr. Winters has structured sales and acquisitions, financing and consignment transactions, supply and fulfillment agreements, licensing and concession agreements and a broad spectrum of other commercial agreements and contracts. Mr. Winters is well-respected for his expertise in factoring and asset-based lending and is particularly proficient in representing clients in the diamond, jewelry, and fashion industries.
John Jureller (“The Litigator”) [ADD HEAD SHOT]
Mr. Jureller is a seasoned litigator with years of experience litigating complex disputes involving commercial and financial transactions. Of particular significance, Mr. Jureller’s expertise in insurance litigation sets him apart from others in our field. He has extensive experience defending and prosecuting D&O and malpractice actions, including those within the context of bankruptcy proceedings. Mr. Jureller’s experience navigating and counseling clients in commercial disputes extends to his representation of offshore liquidators and insolvency professionals in various international bankruptcy and litigation matters. He has represented liquidators in Chapter 15 proceedings, and represented funds and fund managers, foreign companies, and creditors involved in international litigation and disputes.
Sean Southard (“The Facilitator”)
Mr. Southard is a trusted advisor and steady hand during tense corporate restructurings. He brings a common-sense approach to complex matters, facilitating reasonable outcomes for all constituents while playing a lead role in a restructuring or high stakes litigation effort. This typical “facilitator” role also makes him one of the most sought-after mediators working to resolve all sorts of matters before the Bankruptcy Courts for the Southern and Eastern Districts of New York. As a Court-appointed mediator, Mr. Southard has made considerable contributions to a number of cases by helping parties find practical and logical resolutions to complicated legal disputes. Mr. Southard’s clients include commercial debtors, creditors, official committees and fiduciaries. While Mr. Southard’s experience includes matters in industries such as healthcare, social services, wholesale and retail, construction and commercial real estate, he has also been a leader in the turnaround industry handling the unique complexities of professional services firms and not-for-profit organizations.
Fred Stevens (“The Fiduciary”)
Mr. Stevens has not only established himself in the turnaround industry as a highly regarded attorney, but also as a fiduciary who is appointed by the Court or the United States Trustee in various proceedings. In those proceedings, Mr. Stevens is tasked with representing the interests of various stakeholders in proceedings, and with maximizing the value of assets to enable recoveries to creditors and other parties in interest. Mr. Stevens has been a panel Chapter 7 trustee in the Southern District of New York since 2018 and has been appointed as a Chapter 11 trustee in a number of other bankruptcy cases. In addition to serving as a trustee himself, Mr. Stevens has earned the respect of many other panel trustees who have retained him and KWJSS to represent them in various chapter 7 and chapter 11 proceedings. In addition to his trustee practice, Mr. Stevens has been appointed as the Examiner and Court-appointed receiver in various matters. He has also served as a Member of an Arbitration Tribunal under the ICC. In these roles, as well as in his non-fiduciary appointments (e.g., representing creditors’ committees), Mr. Stevens has sharpened his expertise in a variety of industries but has significant experience in the hotel and hospitality industries.
Q: Who are the other members of the firm that contribute to KWJSS’s success?
A: The KWJSS Team does not end with its starting lineup. It includes a deep bench of transactional attorneys and litigators whose breadth of experience revolves around in and out of court restructuring matters, including Brendan Scott, Kate Aiello (TMA NYC 2023 President-Elect), Lauren Kiss, Stephanie Sweeney, Chris Reilly and Andrew Brown.
Q: What are some of KWJSS’s recent wins or notable representations?
A: China Fishery – Representation of the Debtors, which comprised the 12th largest fishing company in the world. The Debtors were comprised of more than 100 international corporate entities, were listed on the Hong Kong and Singapore exchanges, and held more than $1 billion in debt at the time of the bankruptcy filing. The Debtors filed more than 36 separate bankruptcy cases. In these heavily contested bankruptcy cases, KWJSS was able to negotiate resolutions with key creditors and secure the confirmation of two separate plans of reorganization, providing for recoveries to a wide spectrum of creditors.
Century 21 and L&L Wings – Representation of owners of the Debtor and their various real estate interests in several retail bankruptcies, including the owners of Century 21 and L&L Wings, Inc. In addition to representing their clients’ interests in the bankruptcy proceedings, prosecuting and defending any potential claims against the debtor’s estate, KWJSS also represented the owners of Century 21 in buying back the intellectual property, including the rights to use the name “Century 21” in the future, which recently reopened its flagship store in downtown Manhattan.
Baumann Bus – Representation of one of the largest school bus operators on Long Island as Debtors in their liquidating chapter 11 cases. KWJSS organized an expedited sale process involving both public and private sales of the Debtors’ transportation assets (rolling stock) which sold for approximately $14 million. KWJSS then worked with creditors committee to settle insider claims which resulted in payment of approximately $6 million into the Debtors’ estates. Finally, KWJSS worked with special counsel to commence and ultimately settle approximately 70 adversary proceedings against nearly every school district of Long Island for claims based upon nonpayment during the COVID closure period.
FKF3, LLC – The Debtor was formed for the purpose of using borrowed funds to lend to real estate development projects, with borrowings in excess of $60 million from individual and institutional investors. KWJSS represented the post-confirmation trustee in the bankruptcy case. Of note, KWJSS commenced an adversary proceeding against the Debtor’s three principals for, among other things, recovery of fraudulent transfers, and after a three-week jury trial held in the U.S. District Court, obtained a judgment in excess of $75 million.
Q: What are some of the current challenges facing, or upcoming trends you foresee, for the turnaround industry?
A: With the rise in interest rates, inflation and the cessation of many of the COVID-era programs that provided financial assistance during that unprecedented period, all signs point to an increase in financial distress and the expectation that many financially distressed companies will need to restructure both in and out of formal bankruptcy proceedings.
Q: How is KWJSS prepared to meet the anticipated demands of the industry?
A: Although the nature of KWJSS’s practice has enabled us to remain active and engaged in representing clients facing financial distress or negotiating resolutions deriving from financial distress or other pressures, KWJSS has already started to experience an uptick in contacts from clients facing these issues. Because the KWJSS team has the depth and breadth of experience with various types of clients and in a wide array of industries, it is poised to meet the expected increase in issues of financial distress and to work collaboratively with our team, our clients and our adversaries to develop creative solutions for addressing today’s needs.