John W. Costello

Jack Costello is a partner in the Business Transactions Department of Wildman Harrold and the head of the firm's Restructuring & Insolvency practice. Jack has over 30 years of extensive experience in corporate restructurings involving the airline, retail store, transportation, railroad, smoke stack, and real estate industries. He has represented corporate debtors, creditors’ committees, and unsecured and secured creditors in reorganization proceedings across numerous industries. In addition, Jack has served as a court appointed bankruptcy examiner in a large ponzi scheme. He acted as an interim trustee under the U.S. Trustee Program and has represented numerous trustees, including indenture trustees in the Penn Central and Milwaukee Railroad reorganizations. He has also participated in numerous out-of-court reorganizations, compositions, and assignments for the benefit of creditors. Jack is knowledgeable about lender liability issues and is skilled at company reorganization, loans negotiation, loan amendments, cash collateral orders, and plans of reorganization. He has litigated many fraudulent conveyance, preference, and plan of reorganization issues as well as numerous other commercial controversies relating to insolvencies. Jack also has extensive experience in structuring securitized loans, and has drafted numerous legal opinions on various substantive consolidation issues.

Representative Experience:

Currently serves as Litigation Trustee in the high-profile, multi-billion dollar Chapter 11 cases of Comdisco, Inc. and its affiliates. As the court-appointed Litigation Trustee, Jack is litigating 65 cases filed in the federal and state courts of Illinois against Comdisco’s former senior management. These engagements involve the Trustee’s enforcement of more than $74 million in promissory notes executed by senior management. The enforceability of these notes has been an issue in numerous court proceedings over the past several years in both federal and state courts. He has won substantive court decisions exceeding 30-plus rulings. In September 2008, Jack secured summary judgment in Federal Court to collect the $74 million outstanding. An appeal is currently pending before the Seventh Circuit Court of Appeals.
Represents the Chapter 11 Trustee in a suit making various claims against numerous defendants in connection with their operation of Doctors Hospital and their transactions with the hospital prior to its bankruptcy. In 2003, in our appointed capacity of Chapter 11 Trustee, Jack had reached a $5 million settlement with many of the defendants in bankruptcy court, and the settlement was affirmed by the District Court and Seventh Circuit Court of Appeals. In 2006, the case was tried against the single remaining defendant, a securitization trust that had received payments of rent from the hospital. Finding in favor for our client, the bankruptcy court ruled that many of the rent payments were fraudulent transfers and entered a multi-million dollar judgment against the defendant. Both parties appealed, and the district court affirmed the bankruptcy court's judgment. Both parties have now appealed to the Seventh Circuit.
Represented Bahamian professionals as liquidators of MJ Select Global Ltd., an off shore investment vehicle. Counsel filed ancillary bankruptcy proceedings to ensure an orderly liquidation and to prevent and enjoin the race to, and dissipation of, the assets of MJ Select in previously filed state and federal litigation asserting a ponzi scheme and various types of securities fraud. Counsel conducted numerous examinations and other discovery under the Federal Rule of Bankruptcy Procedure 2004 and commenced litigation against numerous parties to recover transfers and damages for wrongful conduct. Counsel also assisted the liquidator in connection with related investigations, fact gathering, and evidentiary proceedings in foreign jurisdictions. In addition, counsel represented the liquidators and intervened in federal securities fraud litigation. Recently, counsel negotiated a settlement with the majority of the litigants in the federal court litigation. This engagement tested the limits of the enforceability and recognition of foreign insolvency proceedings in American bankruptcy courts as well as the extent to which Bahamian insolvency law would take precedence over rights and remedies available under American Law.
In separate matters, represented a doctor and a lawyer faced with the entry of multi-million dollar jury verdicts against them. Both were confronted with their inability to satisfy the respective verdicts and impending bankruptcy. Counsel analyzed the exempt and non-exempt assets of the defendants in multiple districts, the effect of indemnities and insurance, and the bankruptcy amendments of 2005 on individuals and exemptions; counsel also participated in the negotiations with the plaintiffs. Both matters were settled for substantially less than the face amount of the judgments, and both avoided bankruptcy.

Professional Associations:

Chicago Bar Association

Illinois State Bar Association

American Bar Association

The American Bankruptcy Institute

Turnaround Management Association

Bar Admissions:

Illinois, 1972

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