The Many Faces of a Bankruptcy Lawyer

Bankruptcy is a haven for Geminis, sufferers of Multiple Personality Disorder, and those who are a little bit country and a little bit rock-and-roll. As will be a recurring theme in this guide, no other practice allows the practitioner to try on so many different roles -- and the opportunity to excel at them. Gregory Willard, head of Bryan Cave LLP's Bankruptcy, Restructuring and Creditors' Rights Client Service Group speaks for most bankruptcy practitioners when he describes bankruptcy as the "last bastion of generalists."

Bankruptcy is more than simply a series of hearings before a bankruptcy judge. It's a court-managed transactional process, with every transactional decision having a litigation counterpart, and vice versa. Appropriately, bankruptcy attorneys get to play both sides of the fence, all along counseling their clients on the impact of the Code on their business decisions. And within the transactional and litigation worlds, every area of law is touched upon. In bankruptcy, "every legal relationship has to be resolved," observes New Jersey practitioner Ben Becker of Becker Meisel, LLC, and those relationships run across the substantive spectrum of law.

Among the most common roles that a bankruptcy attorney plays are:

Litigator: It's no surprise that in many law firms, the bankruptcy group is a sub-section of the litigation practice. Bankruptcy is a courtroom process, with a Bankruptcy Judge overseeing each bankruptcy proceeding and approving all major debtor -- and some creditor -- business decisions. A bankruptcy attorney spends much of her time in court, arguing for or against debtor and creditor motions and often participating in full-scale trials.

Commercial financing: In Chapter 11 cases, where the debtor continues operating as a "going concern," a primary focus of the weeks before and immediately after the bankruptcy filing is negotiating "debtor-in-possession" - or DIP -- financing. These loans provide debtors with their financial lifelines, provide bankrupt corporations with sufficient funds to keep their doors open (or at least close them very slowly and carefully). Bankruptcy attorneys negotiate and draft these DIP financing agreements, fluent in the provisions of the Code and case law governing these facilities.

Mergers and acquisitions attorney::Chapter 7 and many Chapter 11 cases revolve around asset sales, often of the entire business of the debtor. At some firms, bankruptcy attorneys work hand-in-hand with m&a attorneys in creating auctions processes (yep, you heard that-- auctions, often complete with gavels) and negotiating and closing these sales; More often, the bankruptcy attorney performs all of the m&a work, including negotiating and drafting relevant purchase and ancillary agreements and overseeing the sale closings. And in all situations, it is the bankruptcy attorneys who request (and hopefully secure) the Court's approval of these sales.

Labor and employment: Bankruptcies involve businesses, and businesses have employees. Bankruptcy attorneys provide counsel in communicating with a debtor's labor force, complying with federal and state laws, and stand on the front lines of negotiations of, and disputes about, employee severance and retention programs.

Uniform Commercial Code/Secured Transactions: Creditors' secured status -- and whether debtors can "avoid", or void, a creditor's security interest -- is an important issue in all bankruptcies, and most bankruptcy attorneys acquire some knowledge of, and often expertise in, the Uniform Commercial Code and other aspects of security interests.

Chief Operating Officer: In Chapter 7 proceedings and the occasional Chapter 11 case, the court appoints a bankruptcy trustee, often a bankruptcy attorney, to operate and/or wind-down the debtor's business. Here, the trustee gets to act as businessman and client, typically hiring another attorney to do all legal work.

And that list just scratches the surface. Bankruptcies also involve issues of tax, real estate, landlord-tenant relations, environmental law, telecommunications, securities regulation, securities fraud, anti-trust, white-collar crime, domestic relations . . . well, the list doesn't stop, given that every bankruptcy is different, and involves every aspect of the debtor's financial life. A consumer bankruptcy involving a man in the midst of a divorce will involve all sorts of family law issues; the bankruptcy of a media conglomerate will require knowledge of federal communications regulations. This sheer variety of roles makes bankruptcy a unique and exciting practice, guaranteeing nary a dull moment.