The following is an excerpt from Practice Perspectives: Vault’s Guide to Legal Practice Areas.
Brian Resnick—Partner, Restructuring
Brian Resnick is a partner in Davis Polk’s Restructuring Group. He has substantial experience with a broad range of corporate restructurings and bankruptcies, representing debtors, creditors, banks, hedge funds, asset acquirers and other strategic parties in connection with pre-packaged and traditional bankruptcies, out-of-court workouts, DIP and exit financings, bankruptcy litigation and section 363 sales.
Brian has been widely recognized as a leader in the restructuring field by numerous industry rankings and publications, including Chambers USA, Turnarounds & Workouts and Super Lawyers. The Wall Street Journal’s “Bankruptcy Beat” and Daily Bankruptcy Review chronicled his transition from Juilliard-trained professional musician to partner in one of the world’s top insolvency and restructuring practices.
Brian received a B.M. and M.M. in Percussion Performance from Juilliard, and received his J.D. from Columbia Law School. He joined Davis Polk in 2003 and was elected partner in 2011.
Please provide an overview of what, substantively, your practice area entails.
I represent clients in connection with large, complex restructurings, including in-court bankruptcy cases as well as out-of-court workouts and exchange offers. In bankruptcy reorganizations, I often represent the debtor (the company going through bankruptcy), the lenders (pre-petition, post-petition and exit financiers) or secured or unsecured bondholders (often the creditors who will equitize their debt and become the new owners of the company through the bankruptcy). Our restructuring group also works on many cross-border insolvency and restructuring matters, particularly in Asia, Brazil and other parts of Latin America. We also work extensively with international and domestic financial institution clients on “too big to fail” issues, including on their “living wills” required under the Dodd-Frank Act.
Ultimately, we restructuring professionals are in the business of helping companies through their darkest days, an endeavor that if done skillfully, can preserve hundreds or thousands of jobs and result in the successful deployment of capital for investors.
What types of clients do you represent?
My practice is a mix of company-side and creditor-side work. Recently I have represented companies such as Patriot Coal, Bonanza Creek and Arch Coal in their chapter 11 cases. On the creditor side, representative clients include ad hoc groups of noteholders (mainly hedge funds and private equity funds) in a number of oil and gas restructurings, including Midstates Petroleum and Memorial Production Partners; and senior lenders in restructurings and bankruptcies such as Toys “R” Us, Foxwood Casinos, Eastman Kodak, Delphi Automotive and Federal Mogul Corporation.
What types of cases/deals do you work on?
I work on a broad range of corporate restructuring and bankruptcy matters. The energy industry has been particularly busy over the past few years. I have represented several coal and oil and gas companies and significant creditor groups in connection with the companies’ out-of-court restructurings and chapter 11 cases.
I am also heavily involved in Puerto Rico’s ongoing restructuring efforts, representing the Ad Hoc Group of Bondholders of Puerto Rico’s Government Development Bank, as well as the Bonistas del Patio, an organization that represents the interests of over 60,000 citizens of Puerto Rico in connection with their holding of over $12 billion in Puerto Rico bond debt.
Other highlights include representing the Federal Reserve Bank of New York and the U.S. Department of the Treasury with respect to their $182 billion in financings for American International Group (AIG) in connection with the 2008 financial crisis; the joint administrators and liquidators of Lehman Brothers International (Europe) and its U.K. Lehman affiliates, including in connection with the tens of billions of dollars of claims that those companies have against Lehman’s U.S. entities; the independent directors of MF Global in connection with MF Global’s October 2011 collapse into bankruptcy; and several major financial institutions in connection with Dodd-Frank Resolution Planning.
How did you decide to practice in your area?
I was drawn to restructuring because of the opportunity to practice on both the corporate and litigation sides, and I like the fast-paced and high-stakes nature of the matters. From the day I started at Davis Polk, I have been mentored by two leaders in the field, Don Bernstein and Marshall Huebner. They exposed me to interesting matters and entrusted me with meaningful work early on in my career. Furthermore, my father was a leading bankruptcy practitioner and scholar. He loved the field and found the work meaningful and interesting, and really enjoyed the community aspect of the practice. Growing up with his example sparked my interest in the practice from a young age. Bankruptcy professionals are like one big happy family—we fight like mad in court and in meetings in front of our clients, but when we get together socially and at charity events (a frequent occurrence), we are all good friends.
What is a typical day or week like in your practice area?
One of the best things about the restructuring practice is that no two days are the same. I could start my morning with a presentation to a Board of Directors on why they should or should not be entering into bankruptcy or a save-the-company financing transaction, or a negotiation between various parties about a distressed merger, and by the afternoon I could be in court arguing a legal issue in another case. I spend my time on such diverse tasks as working with bankers on the financial aspects of restructurings and scoping out new potential business opportunities, and drafting litigation briefs and corporate documents related to distressed financings, mergers and restructurings. This mix is unique to the practice and a big part of what attracted me to it.
What is the best thing about your practice area?
Restructuring is intellectually very challenging and often involves advising senior clients on tough judgment calls on bet-the-company issues. At the end of the day, we are trying to save companies in distress and peoples’ jobs, which brings deep meaning to my work. Additionally, on the investor side I can help them recover major investments and help investors make successful rescue loans or capital infusions upon a company’s emergence from bankruptcy. Also, I have had the unique opportunity to work with entire industries as they transform, most recently with the coal and oil industries, but before that airlines and financials.
What is the most challenging aspect of your practice area?
The most challenging aspect of restructuring is the multi-faceted nature of the matters. I tend to work a lot with multiple parties with diverse interests, such as the office of the U.S. Trustee (an arm of the Department of Justice that oversees bankruptcy cases), governmental entities that have environmental concerns, management teams with compensation and job stability issues, senior lenders and junior creditors, rank and file employees and union members, litigation counterparties, and others. Bringing upwards of a dozen parties together on a restructuring matter – all the while with litigation looming in the background if we don’t reach consensus – creates a fast-paced and challenging work environment. My biggest accomplishments are when I succeed in bringing together many parties to reach a complex agreement on the terms of a restructuring and avoid unnecessary litigation (though, when litigation is inevitable, I certainly enjoy a good courtroom victory!).
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
I would recommend a good foundation in both corporate finance and litigation. It is also important to understand negotiation styles and techniques. If possible, I would urge students to take some basic finance and accounting courses at the business school, given how closely restructuring lawyers work with bankers and investors. We need to be facile with spreadsheets and financial models.
What misconceptions exist about your practice area? What do you wish you had known before joining your practice area?
In my opinion, the greatest misconception about restructuring is that it is a niche area. This could not be further from the truth because we are involved in every aspect of a distressed company, including its capital markets needs, its general corporate work, real estate, environmental, financing, litigation, etc. When a company is in distress, insolvency touches all of these areas. In this respect, and considering that in most cases the ownership of the company changes hands (from the prior owners to the creditors), restructuring as practiced at the major law firms is similar to M&A.
A related misconception is that restructuring is too narrow of a focus area to prepare for an in-house job later in your career. I would argue that restructuring is one of the best practices for preparing to practice general corporate law outside of a firm due to the diversity of the practice and the skills needed to be a restructuring lawyer.
What is unique about your practice area at your firm, and how has it evolved since you have been at the firm?
Davis Polk is one of the few top firms with a restructuring practice that is equally comfortable handling company-side, lender-side, and bondholder assignments as well as international work, working seamlessly with companies, banks, hedge funds and private equity firms alike. We also uniquely offer incredible cross-practice strength. While many firms have great restructuring lawyers, Davis Polk offers the full suite of corporate and litigation capabilities at the highest levels.
The firm is further distinguished from peers by its unparalleled market share of financial institutions clients on “living wills” required under the Dodd-Frank Act, work we do hand in hand with our renowned Financial Institutions Group.
When I started at Davis Polk, our restructuring group was mainly focused on lender work. Early on (in the mid-2000’s, starting with the Delta Air Lines case), we branched out into debtor work and have since taken more than a dozen large companies through chapter 11. More recently, we greatly expanded our representation of hedge funds and private equity firms, and we are currently representing over 60 such investor clients in various restructurings. Again, it is very unique to have a top-ranked practice that extends to these different types of representations.
What activities do you enjoy when you are not in the office, and how do you make time for them?
Prior to becoming a lawyer, I earned both my bachelor’s and master’s degrees in percussion from Juilliard and worked as a professional musician, playing drums and percussion for 14 Broadway shows, television shows such as Saturday Night Live and with pop and classical artists ranging from Art Garfunkel to Luciano Pavarotti. I still occasionally play for fun on weekends.
Most of my time outside of work is spent with my wife and three children, twin 14-year-old boys and a 12-year-old daughter. My wife is a violinist for The Lion King and founded and runs the music school Suzuki on the Island, where my kids grew up learning violin and cello. It is such a pleasure watching our children grow in every way, but particularly as young musicians.