All Things Chapters 7 and 11

Lewis & Roca’s Susan Freeman climbs mountains and bankruptcy ranks

Published in 2010 Southwest Super Lawyers — May 2010

In 1973, the U.S. National Bank, led by financier C. Arnholt Smith, who had made a series of ill-advised financial decisions, collapsed in what was then the largest-ever U.S. bank failure. The aftershocks were felt widely, and one of the casualties was the Westgate-California Corporation.

And that’s where Susan Freeman of Lewis & Roca comes in.

She was in her third year of practice when Westgate California Corp. v. Valley National Bank of Arizona landed on her desk. “The case came to our firm because senior partner Gerald Smith was a national expert in bankruptcy,” says Freeman, whose team represented the two Westgate trustees. “The adversary proceeding alleged Valley National Bank of involvement in [C. Arnholt] Smith’s wrongdoing over many years.”

Among the allegations were securities fraud, breach of fiduciary duties and breach of contract. Making things even more dizzying, much of the work took place in 1978, which was when the current bankruptcy code went into effect. “It was the largest and most complicated case I’d worked on, and was a real challenge,” she says. “Eventually, the litigation settled with the trustees getting valuable Air California stock and the bank’s unsecured claim paid in a reduced amount.”

She’s since made headlines in other bankruptcy cases, including the America West Airlines bankruptcy case. From 1991 through 1994, Freeman represented 14 (nearly all) of the aircraft lessors and lenders as sole or local counsel. America West emerged with a healthy plan of reorganization in 1994 and merged with U.S. Airways in 2005.

But it’s not all about successes. One of Freeman’s most interesting cases hinged on a client’s attempt to acquire the NHL’s Phoenix Coyotes. Her client didn’t score the acquisition, but she still relished the opportunity.

“I represented Jim Balsillie, co-founder of Research In Motion, which makes BlackBerrys. He wanted to acquire the hockey team and bring it to Ontario,” she says. “Unfortunately, the NHL fought to the nail and acquired the Coyotes. The league was allowed to buy the team for about $100 million less than Balsillie’s offer.

“It was the first time a bankruptcy court had been asked to order relocation in conjunction with a sale,” she says, noting that concern for the forced relocation of the franchise over the league’s objections trumped Balsillie’s offer. “The combination of sports law, a wonderful client and cutting-edge use of the bankruptcy code was enormous fun.”

Freeman also does appellate law. A few years ago, she set a precedent assisting with Tennessee Student Assistance Corp. v. Hood and its corollary case, Central Community College v. Katz. The U.S. Supreme Court accepted her team’s amicus curiae briefs in both cases, supporting the argument that states are bound by bankruptcy discharges, and trustees and debtors can sue states to recover assets in bankruptcy cases. “Combined, the two cases eviscerate state efforts to avoid involvement in bankruptcy cases,” she says. “It was really cool to have the court agree with the arguments in my brief.”

Although she has influenced bankruptcy and appellate law in three decades of practice, her greatest feat may have been scaling Mount Kilimanjaro, which she did in February.

“Last year I visited Nepal with the Foundation for Global Leadership, where I met with various NGOs and had the opportunity to see the Himalayas,” she says. “I thought, ‘Hey, I could climb a mountain—just not Everest.’

“So I contacted Roxana Bacon, an Arizona lawyer and first female president of our state bar,” she continues. (Bacon,

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