Jim Day specializes in the resolution of complex commercial creditor-debtor issues, emphasizing the representation of companies and individuals in chapter 11 reorganizations, chapter 9 debt adjustments and out-of-court workout negotiations and agreements.
Jim has significant experience in the residential, commercial and retail real estate sectors, including multiple engagements involving a dozen or more lenders holding claims aggregating over $100 million, and in other industries including manufacturing, tech, fishing and maritime and franchised restaurants. Jim has been named a Super Lawyer by Washington Law & Politics each year since 2003, and was named 2020 Lawyer of the Year in Litigation-Bankruptcy by Best Lawyers.
Chambers USA, an independent directory that researches and assesses law firms and lawyers in America, calls Jim a “wonderful ... incredibly competent debtors’ attorney ... at the forefront of big cases in the city.”
Additional Attorney Information
Related-entity clients that owned and leased several commercial properties defaulted on obligations to their primary lender. After workout negotiations were unsuccessful, the lender sought the appointment of a receiver over all the properties, leading to chapter 11 filings by each of the entities. Shortly after the filings, Mr. Day negotiated a comprehensive plan agreement with the lender. However, one tenant of one of the properties was a state-licensed cannabis producer, and the US Trustee filed a motion to dismiss. Mr. Day obtained a denial of that motion, and later – over the objection of the US Trustee – successfully obtained confirmation of a plan of reorganization that paid all creditors in full. The US Trustee appealed to the district court, which affirmed the bankruptcy court. The Ninth Circuit Court of Appeals later affirmed the district court, in the first published circuit-level opinion addressing the intersection of the Bankruptcy Code and the Controlled Substances Act.
Bush Kornfeld served as local and conflicts counsel to the Unsecured Creditors Committee in the chapter 9 bankruptcy of a public hospital district, which had two hospitals and multiple urgent care and outpatient facilities and approximately $370 million of secured and unsecured debt. The case was contentious, as the debtor made little effort to work with the Committee in any consensual fashion. When the debtor filed a liquidation plan that would have left unsecured creditors with virtually no distribution, Mr. Day filed an objection to confirmation on the basis that a comprehensive prepetition financing arrangement the debtor had entered into was void under state law and could not be the basis for conveying value under the proposed plan. Within days of the filing of the objection, the debtor proposed to mediate with the Committee for the first time, leading to a settlement that transferred several million dollars of value to a liquidation trust for the benefit of unsecured creditors.
Client sold a valuable hotel site in Pompano Beach, Florida. Disputes among various creditors arose as to the appropriate division of the sale proceeds, leading to the commencement of litigation in Florida, Utah, Texas and Washington. Mr. Day commenced a chapter 11 bankruptcy case to create a single forum for the resolution of the disputes. One party refused to negotiate. Mr. Day then pursued litigation in bankruptcy court and federal district court in Utah, succeeding in disallowing the claim of the intransigent party in full. Mr. Day later confirmed a liquidation plan that returned a sizable dividend to the remaining creditors.
Client was a real estate developer who had personally guaranteed various acquisition and construction loans from sixteen separate lenders totaling more than $100 million. Following the collapse of the real estate market, various lenders commenced litigation against the client, which led to the commencement of an individual chapter 11 case. Mr. Day successfully negotiated various settlements with individual lenders during the course of the case, and ultimately a consensual plan of reorganization that returned significant value to creditors while permitting the client to retain most of his assets.
The client developed a shopping center with construction financing largely held by a four- bank syndicate totaling about $65 million. After completion, the center did not lease up as quickly as anticipated, and the financing came due. Mr. Day negotiated a forbearance agreement on behalf of the client, during which disputes among the lenders arose. Eventually, the lender group commenced charging default interest of almost $250,000 per month. Mr. Day commenced a chapter 11 case on behalf of the client, following which one of the lenders sold its interests to a third party in violation of the relevant loan agreement. Mr. Day obtained a preliminary injunction barring the acquiring entity from participating in the bankruptcy. Later, after two days of trial, Mr. Day negotiated and obtained confirmation of a consensual plan with the remaining lenders that paid all creditors in full and allowed the client to retain its project.
Bush Kornfeld represented Pierce County Housing Authority in its chapter 9 municipal bankruptcy, the first chapter 9 case in the Western District Washington in approximately 20 years. The client owned and operated 14 apartment complexes and a number of other single-family residences, and served thousands of low and moderate income families and individuals. The client had faced baseless litigation that had drained its reserves, and commenced the chapter 9 case to allow it to adjust its obligations. After long and difficult negotiations, a consensual plan was presented and approved by the bankruptcy court that allowed the client to retain each of its properties and maintain its operations and its mission. Mr. Day has also represented other municipal entities in out-of-court workout solutions.
The client owned several income-producing properties securing various loans from two banks totaling $14.5 million. A loss of a key tenant and the corresponding income largely precipitated the bankruptcy filing. Mr. Day made significant efforts to negotiate a consensual plan with the client’s primary lender, all of which were rejected. Moments prior to the start of the first day of trial on plan confirmation, the bank asked for settlement discussions, and the parties thereafter negotiated a consensual plan.
Tully’s was a specialty coffee retailer and operated 57 company-owned and 12 franchise locations. Severe cash flow challenges necessitated a chapter 11 bankruptcy filing and a sale process. Mr. Day represented the company in its bankruptcy filing and sale process, leading to a successful thirteen-hour auction among multiple interested buyers and payment to unsecured creditors of 90% on claims.
Coast to Coast was a $100 million fresh and frozen seafood distributor hit hard by a collapse in the frozen shrimp market as well as by a secured lender that sought to exit the industry by systematically reducing the client’s funds availability. Mr. Day represented Coast to Coast in connection with a chapter 11 filing and confirmation of a plan through which approximately $16 million of secured debt was fully paid and a significant dividend was paid to unsecured creditors.
Education & Bar Memberships
- Juris Doctor, University of Washington, 1990
- Bachelor of Arts, Economics, University of Washington, 1987
- Washington State Bar Association
- California Bar Association (inactive)
- Admitted to Practice in Western and Eastern Districts of Washington, Ninth Circuit Court of Appeals
- Law Clerk to Judge Sidney C. Volinn, U.S. Bankruptcy Court, Western District of Washington, on both trial matters and appeals before the Bankruptcy Appellate Panel of the Ninth Circuit
Presentations & Awards
- The Cannabis Conundrum: American College of Bankruptcy, Santa Fe, New Mexico, 2019
- Enforcement of Constructive Trusts and Equitable Liens in Bankruptcy, Hawaii Bankruptcy Bar Association Fall Conference, 2016
- Plenary v. Individual Chapter 11 Issues, 29th Annual NW Bankruptcy Institute, Oregon State Bar, 2016
- Chapter 11 Plans and Disclosure Statements and Asset Sales presented at Nuts and Bolts of Representing Chapter 11 Debtors CLE, Washington State Bar Association
- Executory Contracts and Unexpired Leases, Washington State Paralegal Association
- An Overview of Chapter 11: Leases; Preferences; Cash Collateral; Chapter 11 plan process; Involuntary Bankruptcy, Washington State Bar Association
- Automatic Stay, Relief from Stay, Mortgage Arrearages, Objections to Confirmation, Washington Law Institute
- Gambling and Fraudulent Conveyances: Current Issues of Recovery of Fraudulent Transfers, King County Bar Association
- The Challenges Ahead in Residential Real Estate Development: The Borrower’s Perspective, Lorman Business Center
- Real Estate Insolvencies and Restructuring in and Outside of Bankruptcy, 21st Annual Bankruptcy Institute, Oregon State Bar
- Real Estate Litigation: Attaining Results and Avoiding Pitfalls, Washington State Bar Association
- Bankruptcy Section Amendments to Chapter 11 Under Bankruptcy Abuse Consumer Protection Act 2005, King County Bar Association
- Chambers USA, America’s Leading Lawyers for Business, Bankruptcy Section 2019
- Best Lawyers, 2020 Lawyer of the Year in Litigation-Bankruptcy
- Best Lawyers, 2012–2020 editions (Bankruptcy and Creditor-Debtor Rights Law)
- Seattle Litigation-Bankruptcy “Lawyer of the Year,” 2020
- Thomson Reuters Super Lawyers® 2001–2019
- Thomson Reuters Super Lawyers® Top Washington Business & Transactions Lawyers, 2012–2019
- Seattle Business Magazine’s Best Business Lawyers, Bankruptcy Section
- Seattle Magazine’s Top Lawyers, Bankruptcy Law Section
- Martindale Hubbell A V-rated
- American Bankruptcy Institute
- Turnaround Management Association
- King County Bar Association, Creditor-Debtor Section
- Federal Bar Association, Creditor-Debtor Section
- Garvin v. Cook Investments NW, 922 F.3d 1030 (9th Cir. 2019)
- In re Video Depot. Ltd., 127 F.3rd 1195 (9th Cir. 1997)
- In re Precision Autocraft. Inc., 197 BR 901 (Bankr. W.D. Wash. 1996)
- In re Kemp Pacific Fisheries, Inc., 16 F.3d 313 (9th Cir. 1994)