The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
D. Farrington Yates, Partner — Insolvency
D. Farrington Yates is a bankruptcy lawyer who focuses on litigation related to complex, cross-border insolvencies and restructurings. Mr. Yates advises clients on the investigation, monetization, and pursuit of high-value claims against principals and stakeholders in distress situations. In cases involving fraud, misconduct, or asset concealment, Mr. Yates often works with the firm’s international judgment enforcement teams to pursue asset recovery strategies worldwide.
Recognized by The Legal 500 U.S. as “very responsive, always available and highly dedicated,” Mr. Yates has effectively counseled clients in a variety of industries through global judgment enforcement and asset recovery campaigns that have maximized recoveries in contentious cross-border insolvencies. In addition, Mr. Yates is a Fellow of INSOL International.
Before joining Kobre & Kim, Mr. Yates was a global practice leader and co-chair of the U.S. restructuring, insolvency, and bankruptcy practice at Dentons, where he handled international bankruptcy and insolvency matters.
Describe your practice area and what it entails.
My practice is focused on disputes and investigations connected to insolvency and financial restructuring settings. For example, in one matter, an independent committee of a board of directors for a company that was planning to file for Chapter 11 reorganization asked Kobre & Kim to investigate whether a transaction with its private equity sponsor was fraudulent or not.
In another matter, we represent an insolvency administrator of a failed German bank to wind-down and liquidate the bank’s operations in the United States through Chapter 15 proceedings. The bank had been closed after German regulators found evidence that bank employees facilitated a tax evasion scheme. A final example is where we helped a trustee of a litigation trust to recover assets stolen from a company by one of its former officers by tracing those assets and the flow of money through bank accounts and trusts in other countries before filing court proceedings to freeze and seize those assets.
Generally, I can add the most value if I assist with an investigation or dispute that includes allegations of fraud or wrongdoing, involves a cross-border element, and is related to an insolvency or financial restructuring.
What types of clients do you represent?
I represent court-appointed fiduciaries in insolvency or restructuring proceedings, like insolvency administrators, trustees, and liquidators, as well as financial creditors in insolvency-related disputes. As you can tell from some of the above case studies, my clients are varied but generally fall within the umbrella category of insolvency/restructuring matters where fraud or misconduct is alleged to have taken place across borders.
What types of cases/deals do you work on?
In addition to the above, the Special Investigation Committee for the Federal Oversight & Management Board for Puerto Rico asked the firm to write up a report on how the island became insolvent. This included an analysis of legislative, structural, and fiscal factors that contributed to the financial crisis that ultimately harmed the residents of Puerto Rico. We also looked into alleged wrongdoing by financial institutions, investment banks, and underwriters with respect to certain bond offerings. The report concluded with recommendations on reforms and other measures that could be implemented by the legislature and regulators so that another fiscal crisis could be averted in the future. The report can be found on the website for the Federal Oversight & Management Board.
How did you choose this practice area?
I wish that I could say that I chose this area of practice by design, but in reality, it was by chance with a bit of luck. I focused on commercial litigation when I first started practicing, and I noticed that those in the bankruptcy group appeared and argued in bankruptcy court frequently in hotly contested matters involving complex disputes with large amounts at stake. Those typical elements of insolvency disputes appealed to me, as they usually reflect complex issues being adjudicated in highly visible arenas where creativity and efficiency deliver the best results.
What is a typical day like and/or what are some common tasks you perform?
Each day for me is driven by the cases that I have and what needs to be accomplished to meet the expectations of a client or schedule set by a court. I usually plan and prioritize my day while on the subway into the office. I like to use meals to connect with colleagues, clients, and referral sources. In the evenings, I try to go to the gym to work off any excess adrenaline and also find perspective in the day.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Lawyers essentially do three things—we read, we write, and we talk. Any activity that helps to develop these skills will be useful. Insolvency is a very dynamic practice in that there are many different causes and reasons for financial distress or disputes. I have found that those who are intellectually curious, solutions oriented, adaptable when circumstances evolve, and able to take an intellectual punch now and then are most satisfied with this area of practice.
What is the most challenging aspect of practicing in this area?
There is usually quite intense competition among stakeholders for a piece of a reducing pie with a truncated timetable to resolve disputes.
What do you like best about your practice area?
Because of the challenging aspects described above, you have to assess quickly what is really important in an investigation or dispute, be creative with proposed solutions, and then push hard through advocacy to deliver results.
As many of my firm’s cases involve tools and proceedings in many countries outside the United States, they become complicated puzzles in regards to what tools to deploy and where. As a result, I’m required to have a general understanding of how each system works, what tools are available where, and how they can be used to achieve the client’s goals.
And perhaps I’m being a bit of a law nerd to think that it’s really cool to understand how the law applies and what tools are available to deploy in disputes and investigations in places like Brazil, China, and the British Virgin Islands in addition to those in the United States.
What misconceptions exist about your practice area?
That success for an insolvency practitioner is measured by whoever yells the loudest or is the most offensive. Certainly, negotiations are spirited but usually principled. Most insolvency lawyers are a little bit crazy, but it’s our own kind of crazy that allows us both to understand each other and arrive at solutions fairly quickly.
What is unique about your practice area at your firm?
My colleagues and I are able to deploy insolvency tools in ways most people don’t think of across many jurisdictions. There may be ways that insolvency tools can be used in the United States and abroad to obtain discovery, challenge claims, or provide a basis to insert independent decision-makers into a process that, if used wisely, can help us swiftly arrive at a unique solution for a client.
How is practicing litigation in a boutique different from practicing in a large law firm?
For what I do, practicing at Kobre & Kim is a dream. We are specialists in the areas where we offer services. The firm has offices in the jurisdictions where investigations and disputes around insolvencies and financial restructurings occur most frequently outside the United States.
Also, the firm is small enough so that the lawyers can maintain close relationships with each other and work in a consistently integrated way. The firm is also “conflict-free,” which means that we are hired as special counsel for a particular investigation or dispute, but we don’t typically have institutional, repeat clients like larger firms. That means, practically, that I can pursue or defend clients that might cause conflicts at another firm.