Signal International Workers Get Pro Bono Help

July 20, 2015, 2:36 PM

It’s not often that bankruptcy lawyers who specialize in advising on big-ticket restructurings can apply their expertise in pro bono matters.

But when Signal International Inc., the marine services company, filed a Chapter 11 petition July 12 in Delaware, several firms negotiated a $20 million settlement on behalf of the more-than 200 Indian welders and pipefitters who said the company lured them to work in Mississippi with false promises of U.S. residency and then exploited them after Hurricane Katrina.

Those firms include Kilpatrick Townsend & Stockton LLP, Latham & Watkins LLP, McDermott Will & Emery LLP and Skadden, Arps, Slate, Meagher & Flom LLP.

Their work follows a trial this year spearheaded by Crowell & Moring LLP on behalf of five workers, which resulted in a jury award of $14 million. Signal said that 11 other suits were pending, which prompted the bankruptcy filing.

Signal said it has reached a settlement with the “vast majority” of plaintiffs, anticipating that more will join. As part of the deal, those who sign on agree to support a Chapter 11 plan that Signal intends to file.

In addition to the payment of $20 million, the agreement requires the Mobile, Alabama-based company to issue an apology to guest workers who also sued in Texas and Louisiana, the Southern Poverty Law Center, one of the public interest organizations aiding the workers, said in a statement.

According to the SPLC, the workers, after arriving at the Signal shipyards in Pascagoula, Mississippi, in 2006, learned they wouldn’t receive green cards or permanent residency allegedly promised by recruiters for the company.

The company “also forced them each to pay $1,050 a month to live in isolated, guarded labor camps where as many as 24 men shared a space the size of a double-wide trailer. None of the company’s non-Indian workers were required to live in the company housing,” according to the SPLC statement.

Several calls to the executive offices of Signal went unanswered.

The lawyers working on the restructuring included David Turetsky, Nick Kodes and Eben Colby of Skadden; Nathan Coco of McDermott Will; Shane Ramsey and Matt Hindman of Kilpatrick; and Daniel Adams, Mark Broude and David McElhoe of Latham.

Those lawyers, the SPLC said, “contributed hundreds of pro bono hours to ensure the maximum recovery for the former guest workers while safeguarding their rights.”

Alan Howard of Crowell & Moring LLP led the team at his firm in the trial that resulted in the $14 million verdict.

Because the workers weren’t able to sue as a class, other firms took on cases, too. Sutherland, Asbill & Brennan LLP, DLA Piper LLP, Manatt, Phelps & Phillips LLP, Fredrikson & Byron PA, Kaye Scholer LLP and Covington & Burling LLP also represented groups of former workers awaiting trial, according to the SPLC.

The bankruptcy is In re Signal International Inc., 15- bk-11498, U.S. Bankruptcy Court, District of Delaware (Wilmington).

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