Restructuring megathread Forum

[Anonymous User]

Question for those went to a fund or IB: what finance knowledge did you have? Could you run a model? Had you written one? I took an accounting class in college and passed level 1 of the CFA but that's all my knowledge, which feels ... substantially behind what even a second year analyst would have, so hard to see why a bank would hire me to be an associate.

You're substantially behind a college sophomore gunning for a summer analyst position.

Understanding the M&I 400 inside-out is minimum. You need to understand more nuanced technical questions. For modeling, generally the minimum expectation is you need to know how to build a 3 statement LBO. The waterfall and liquidity roll models (which you will be doing as an associate and almost always comes up in associate modeling tests for interviews) are all based on the 3 statement LBO.

[Anonymous User]

Question for those went to a fund or IB: what finance knowledge did you have? Could you run a model? Had you written one? I took an accounting class in college and passed level 1 of the CFA but that's all my knowledge, which feels ... substantially behind what even a second year analyst would have, so hard to see why a bank would hire me to be an associate.

You're substantially behind a college sophomore gunning for a summer analyst position.

Understanding the M&I 400 inside-out is minimum. You need to understand more nuanced technical questions. For modeling, generally the minimum expectation is you need to know how to build a 3 statement LBO. The waterfall and liquidity roll models (which you will be doing as an associate and almost always comes up in associate modeling tests for interviews) are all based on the 3 statement LBO.

The actual modeling is relatively straight forward to be honest. It’s ultimately a calculator and no one really makes full three statement models, much less full blown LBO model/ in distressed credit. Just trying to bridge to UFCF and then building recovery waterfalls.

RX consulting in my view actually builds the most built out models out of RX IB, Buyside, and RX consulting.

Banks know what candidates they are hiring when they hire former lawyers / people from law school.

[Anonymous User]

OK, but what do they want then?

[jamesyyy]

Bump!

[Anonymous User]

What are the best offices for RX or LME-style debt outside of NYC and Chicago? GDC LA seems to do high level distressed debt work. Nemecek at K&E used to be in LA too and now splits time in Dallas. Houston offices, of course, but maybe waning. What about Washington DC or San Francisco? Minimal, I’d imagine…

[Anonymous User]

OK, but what do they want then?

People who can structure transactions, work a lot without complaining, communicate well, somewhat financially literate, understand bankruptcy/ restructuring, and good network across law firms RX consultants and funds.

[Anonymous User]

People who can structure transactions, work a lot without complaining, communicate well, somewhat financially literate, understand bankruptcy/ restructuring, and good network across law firms RX consultants and funds.

OK, this doesn't really mean anything to me. I'm a midlevel rx associate who ticks all of these boxes (depending on what "structure transactions" means, I suppose). But, like, I've never built or reviewed a model. What are the RX banks (ex. PJT, HL) looking for when they send friendly signals about coming over at the associate level? What would my job be?

What are the best offices for RX or LME-style debt outside of NYC and Chicago? GDC LA seems to do high level distressed debt work. Nemecek at K&E used to be in LA too and now splits time in Dallas. Houston offices, of course, but maybe waning. What about Washington DC or San Francisco? Minimal, I’d imagine…

RX: presuming you mean national-level major cases filed in the big-ticket jurisdictions, Akin DC, Brown Rudnick Boston, W&C Miami come to mind. Many excellent regional (DE, TX, CA particularly) or more industry-focused (hospitality, landlords, etc) shops outside NY/Chicago. PSZJ has offices all over and seems to cross-staff?

LME: there is such a supply-demand imbalance right now that you could probably sit in any office you want. From personal knowledge: KE has people in LA, SF, SLC who do this. Milbank, GDC, Ropes you could choose your location.

[Anonymous User]

How many years of experience do you need before a bankruptcy boutique (something like PSJZ) will give you a look? (FWIW, I’m 3YR in NYC BL RX, creditor side, looking to leave for greener pastures.)

What boutiques should I being looking at? Aside from “boutiques” are there any smaller/regional tristate area firms I should consider for RX?

[Anonymous User]

How many years of experience do you need before a bankruptcy boutique (something like PSJZ) will give you a look? (FWIW, I’m 3YR in NYC BL RX, creditor side, looking to leave for greener pastures.)

What boutiques should I being looking at? Aside from “boutiques” are there any smaller/regional tristate area firms I should consider for RX?

Not sure how many bankruptcy boutiques exist besides PSZJ, Togut, Glenn Agre (if you want to litigate) and KTBS (which seems on the downslope, just looking at the website). In terms of regional firms, what kind of work do you want? Basically you could try to do midlaw-scale versions of traditional BL (either debtor's counsel or being a workout guy for the local bank) or find firms with a niche (e.g., real estate distress, post-fraud stuff like receiverships, professional fiduciary stuff like chapter 7 trustees, claims trading, or repeat chapter 11 players - utilities, large retail landlords, local tax authorities). The two seem very different in my limited experience.

[jamesyyy]

Would love to know how to best leverage an RX seat in Kirk / Latham into buyside distressed investing - has anyone had much experience or know the best way / seniority / method to get there?

[Anonymous User]

Would love to know how to best leverage an RX seat in Kirk / Latham into buyside distressed investing - has anyone had much experience or know the best way / seniority / method to get there?

Kirk / Latham will help. But so will having gone to one of YSHD

[Anonymous User]

Would love to know how to best leverage an RX seat in Kirk / Latham into buyside distressed investing - has anyone had much experience or know the best way / seniority / method to get there?

Have really good luck.

These seats are very very rare and, bluntly, they can hire bankruptcy lawyers when they need them. If you don't have professional investment experience (including banking), it's very unlikely you'd be meaningfully considered. That said, (a) get some out-of-court experience (think LM, rescue capital, etc) - that's a big part of the playbook these days, distressed investing doesn't always mean chapter 11 - and (b) find a way to get in front of those people. This can happen at Kirkland/LW but is more likely to happen at the big ad hoc group shops (PW, DPW, etc).

[jamesyyy]

Is a move to RX IB a must then?

[Anonymous User]

Is a move to RX IB a must then?

If your #1 focus is getting a seat at a restructuring oriented buyside firm, yeah, you are infinitely better served at PJT/PWP/Moelis/Evercore/HL/etc on the RX desk than at KE/LW/PW/DPW/Milbank/Akin.

Like, I'm a senior RX lawyer. If you gave me a list of four failing businesses and asked me which one is the most likely to turn around - I have no idea at all. That feels like an important skill for a distressed investor to have.

[Anonymous User]

Is a move to RX IB a must then?

If your #1 focus is getting a seat at a restructuring oriented buyside firm, yeah, you are infinitely better served at PJT/PWP/Moelis/Evercore/HL/etc on the RX desk than at KE/LW/PW/DPW/Milbank/Akin.

Like, I'm a senior RX lawyer. If you gave me a list of four failing businesses and asked me which one is the most likely to turn around - I have no idea at all. That feels like an important skill for a distressed investor to have.

tbh if you’re a senior (yr 8+) finance/rx lawyer and can’t suss that out, you genuinely need to get on that.

knowing the intricacies of a given business and how they work and what led to them being in the dumpster is a solid 1/3 of the value add.

[Anonymous User]

Would love to know how to best leverage an RX seat in Kirk / Latham into buyside distressed investing - has anyone had much experience or know the best way / seniority / method to get there?

Have really good luck.

These seats are very very rare and, bluntly, they can hire bankruptcy lawyers when they need them. If you don't have professional investment experience (including banking), it's very unlikely you'd be meaningfully considered. That said, (a) get some out-of-court experience (think LM, rescue capital, etc) - that's a big part of the playbook these days, distressed investing doesn't always mean chapter 11 - and (b) find a way to get in front of those people. This can happen at Kirkland/LW but is more likely to happen at the big ad hoc group shops (PW, DPW, etc).

Also should consider about which path you want to be on at a distressed fund. For alot of funds, lawyers are often the head of restructuring / deal guy / process / claims guy vs. a normalway fundamental distressed credit guy. That is an easier move straight out vs. fundamental analyst imo.

[Anonymous User]

Is a move to RX IB a must then?

Like, I'm a senior RX lawyer. If you gave me a list of four failing businesses and asked me which one is the most likely to turn around - I have no idea at all. That feels like an important skill for a distressed investor to have.

Any seniors willing to share reflection on their choice to do RX? Have to decide specialty sometime soon. And while I’ve absolutely loved time in RX, long term prospects seem limited (not bad, just less optionality).

Thx!

[jamesyyy]

What's the best way to pivot to RX IB / distressed investing? Anyone have much experience / advice?

[Anonymous User]

What are the best offices for RX or LME-style debt outside of NYC and Chicago? GDC LA seems to do high level distressed debt work. Nemecek at K&E used to be in LA too and now splits time in Dallas. Houston offices, of course, but maybe waning. What about Washington DC or San Francisco? Minimal, I’d imagine…

Bump. Any SF firms have significant big-case RX staff? Obv. some have high quality mid-market CA work.