Legal News

Is the Bankruptcy Wave Finally Here? Skadden?s New Co-Head Says Yes

By Dan Slater

We’ve used the art before and we’ll use it again. There he is, Master Laird, Rider of Big Waves, shredding a heavy.

With unemployment on the rise and our Fed Chairman warning of recession, a report in yesterday’s NLJ about those other wave riders, bankruptcy lawyers, caught our eye. Skadden has named a third co-leader to help head its restructuring group “in anticipation of more bankruptcy and distressed work over the next three years and with an eye to succession-planning at the firm.”

Timothy Pohl, 41, has joined Skadden’s two other heads, Jack Butler and Gregory Milmoe. Pohl and Butler, 52, are based in Chicago, while Milmoe, 60, is based in New York. Among clients Pohl has worked with are America West Airlines, SPO Partners and Black Diamond Capital Management.

A third restructuring co-head? Maybe the wave really is coming, or maybe, like Master Laird, Pohl, Butler and Milmoe have already dropped in. We called Pohl to ask him about his promotion and the state of the bankruptcy market.

“I do think that there’s been a noticeable pick-up in core restructuring work in the first quarter of ‘08, compared with ‘07,” said Pohl. “Our view is that we’re on the front end of a wave. It’s hard to predict the uptick, but I think it’s started and so does the firm.”

But this wave might be different, says Pohl. “My own view is that in the next wave of bankruptcy you’ll see more out-of-court situations — workouts, restructurings and M&A transactions around distressed companies — than free-fall bankruptcies that last for years in court. The slice of the pie attributable to conventional Chapter 11 filings will be smaller than in previous waves. And [non-Chapter 11] deals will be less noticeable to people who aren’t in them.”

LB’ers: We’ve heard of other restructuring practices bulking up, but we’re not seeing as much headline-grabbing bankruptcy news as we expected. Is this wave, as Pohl implies, more a chill swell than a free-falling, Laird-like heavy?

Full post as published by Law Blog - WSJ.com on December 31, 1969 (boomark / email).