CenterPoint Properties and HA-LO Industries, Inc.

Client:	CenterPoint Properties
Representation:	Bankruptcy
Date:	2007
Locations:	Illinois

Summary:

Schiff Hardin represented CenterPoint Properties, the developer and lessor of the headquarters of the debtor that, after rejection of the lease, had a $28 million claim after applying the cap under Section 502(b)(6) of the Bankruptcy Code. We made new law in the United States Court of Appeals for the Seventh Circuit holding that a mid-month rejection of the lease did not require proration of the rent (just pass-through expenses) in Ha-Lo Industries, Inc. v. CenterPoint Properties Trust, 342 F.3d 794 (7th Cir. 2003), and successfully distinguished prior Seventh Circuit authority requiring proration of rent following a mid-month bankruptcy petition. This was based, in part, on favorable law that we made on behalf of the same client in In re Montgomery Ward Holding Corp., 268 F.3d 205 (3d Cir. 2001).

We successfully litigated issues regarding the limitation on the claim and conducted an auction that allowed the sale of the claim for 80% of its face value and nevertheless retained a participation to recover upside from future litigation. This turned out to be a good trade, as CenterPoint's recovery will exceed the payout to the other unsecured creditors.

In re HA2003 f/k/a HA-LO Industries, Inc., case no. 02-12059 (Bankr. N.D. Ill.)