Shearman & Sterling has successfully defended Oneida Ltd. against a claim by Peter J. Solomon Company, L.P. (PJSC), one of the last contested matters arising out of Oneida’s Chapter 11 proceedings.

A plan of reorganization was confirmed for Oneida in August 2006. PJSC, the company’s financial advisor in connection with an earlier out-of-court restructuring in 2004, sought investment banking fees relating to a number of the transactions undertaken by Oneida during the Chapter 11 proceeding, including its debtor in possession financing, its exit financing, and its agreements with various creditor constituencies over the restructuring of their debt.

PJSC had claimed that it was entitled to the fees pursuant to the so-called “tail” provision in its 2004 engagement letter, and more specifically, that the tail fee applied to the Chapter 11 transactions because Oneida had not sent a written notice of termination, as required by the engagement letter, at a point that would have ended the one-year tail period before the Chapter 11 case.

Oneida objected by contending (among many grounds) that, notwithstanding the language of the engagement letter and the fact that Oneida had not sent its written termination until later, the parties’ conduct indicated that each side actually interpreted their agreement not to require a written notice of termination in every instance, including where (as was the case here) PJSC had completed and had already been paid for one set of transactions of the type for which it had been hired.

The case was tried in the United States Bankruptcy Court, Southern District of New York in November 2008. On February 6, Judge Allan Gropper issued his decision, finding in favor of Oneida and rejecting PJSC’s claim for the investment banking fee in its entirety.

The team was led by partner William Roll (New York-Litigation) and included associates Seth Kean (New York-Litigation), Irina Dragulev (New York-Litigation), Joseph Barden (New York-Litigation), and Ned Schodek (New York-Bankruptcy & Reorganization), and legal assistant Gillian Thompson.

For more information, please contact: Ron Brandsdorfer | New York | T +1.212.848.5081 |