Cases & Deals

Chapter 7 Trustee of Anthracite Capital recovers in excess of $50 million for estate

Clients Chapter 7 Trustee of Anthracite Capital, Inc.

Jones Day represented the Chapter 7 Trustee (the "Trustee") of Anthracite Capital, Inc. ("Anthracite") in its chapter 7 bankruptcy which filed on March 15, 2010 in the U.S. Bankruptcy Court for the Southern District of New York. The Trustee retained Jones Day to serve as his special litigation counsel to help examine Anthracite's pre-bankruptcy business operations and the conduct of its management.

Jones Day subpoenaed records from Anthracite’s investment manager, BlackRock Financial Management Inc. (“BFM”), who retained all of Anthracite’s records. After a difficult discovery period and an extensive review of records and public information, Jones Day filed a complaint on behalf of the Trustee against BFM, certain other BlackRock entities and current/former officers, directors and/employees (collectively, the “BlackRock Defendants”). The complaint asserted various claims, including, but not limited to, allegations of breach of fiduciary duty, preference/avoidance/fraudulent transfers and substantive consolidation.

The Parties agreed to submit the matter to mediation, which resulted in further discovery and eventually a heavily negotiated settlement between the Trustee and the BlackRock Defendants. The BlackRock settlement resulted in a recovery of approximately $47 million for the estate and the release of over $33 million in secured affiliate claims.

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