Can someone explain what bankrupcy work entails? Forum

[Veyron]

Like midlaw/biglaw BK work, not personal BK.

[gwuorbust]

this is relevant to my interests

[Stanford4Me]

From my limited experience, it's one of the few "general practitioner" practices there is. In your early days you're doing a lot of document review and you'll have some experience in court. As you get more senior you're able to strategically plan bankruptcy filings for your clients -- figuring out what paperwork needs to be filed, considering litigation strategies that will be employed during the bankruptcy, helping your client through all the intricacies of the bankruptcy laws.

Anyone feel free to correct/elaborate.

[azntwice]

depends on who you represent.

1) debtor. you probably will not represent the debtor, but this involves filing for bankruptcy, entertaining creditor options in a chapter 11, managing paperwork for liquidation, regulatory filings, etc.

2) creditor. you will probably be trying to get your money back from the debtor. either that or fending off preference transfer actions. structuring agreements to avoid having to give money back to the debtor/trustee; etc. or, maybe you will be on a deals team that is putting together an offer to purchase a chapter 11 corporation, restructuring.

[IrwinM.Fletcher]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

[Stanford4Me]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

That's the gist I've gotten.

[Veyron]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

That's the gist I've gotten.

MOAR details?

[KeepitKind]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

i'd say that's accurate. I'm working as an extern at a bankruptcy court right now (as in, right now, like I should be entering orders). The attorneys that practice at larger firms say that bankruptcy is one of the few areas that allows real creativity from the attorneys on the transactional side, but you still often appear in front of the judge to argue motions. I mostly see what goes on in the courtroom (relatively simple/standardized court process compared to district court) but Ch 11's of large corporations require all sorts of financial consultants and bankers to assess the vitality of the business and how to proceed (and this takes place outside the courtroom). i'd love to answer any questions that aren't above my paygrade (unpaid intern)!

[Veyron]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

i'd say that's accurate. I'm working as an extern at a bankruptcy court right now (as in, right now, like I should be entering orders). The attorneys that practice at larger firms say that bankruptcy is one of the few areas that allows real creativity from the attorneys on the transactional side, but you still often appear in front of the judge to argue motions. I mostly see what goes on in the courtroom (relatively simple/standardized court process compared to district court) but Ch 11's of large corporations require all sorts of financial consultants and bankers to assess the vitality of the business and how to proceed (and this takes place outside the courtroom). i'd love to answer any questions that aren't above my paygrade (unpaid intern)!

Explain MOAR about the deal aspect of the work (for large corps)?

What sort of stuff does the courtroom work entail?

[fathergoose]

It appears to involve a fair amount of both transactional (due diligence, transferring assets, etc.) work AND litigation (fighting over assets before a judge). Is this correct?

i'd say that's accurate. I'm working as an extern at a bankruptcy court right now (as in, right now, like I should be entering orders). The attorneys that practice at larger firms say that bankruptcy is one of the few areas that allows real creativity from the attorneys on the transactional side, but you still often appear in front of the judge to argue motions. I mostly see what goes on in the courtroom (relatively simple/standardized court process compared to district court) but Ch 11's of large corporations require all sorts of financial consultants and bankers to assess the vitality of the business and how to proceed (and this takes place outside the courtroom). i'd love to answer any questions that aren't above my paygrade (unpaid intern)!

On a scale of 1 to I-hate-my-life, how would you rate the professional satisfaction of the attorneys you see in court?

[KeepitKind]

if a large corporation files for Ch 11 bk then they hope to restructure in a 5-yr plan that creditors will approve b/c they will necessarily obtain a higher return on their loans than if the company simply liquidated (Ch 7).

the attorneys must guide the business in a way that will make their repayment plan feasible. This usually means cutting an uprofitbale portion or firing employees or cutting R&D funding or anything that will increase their ability to repay unsecured creditors (secured creditors are set either way - they have a security interest in case the debtor defaults).

the judge oversees the entire process (along with the trustee) to ensure an equitable resolution for creditors and a fresh start for the debtor (boilerplate objectives of the bankruptcy code)
if a trustee or creditor doesn't agree to any part of the plan, then they object to plan confirmation in court and the judge rules on the issue.

large ch 11 make a buttload of money in professional fees. Today we oversaw lawyers taking cuts around $400,000 as part of their 26(!) interim application for fees. prob for this reason, the biglaw attorneys practicing high-level Ch11 bankruptcy seemed quite satisfied, professionally and financially.

[Veyron]

if a large corporation files for Ch 11 bk then they hope to restructure in a 5-yr plan that creditors will approve b/c they will necessarily obtain a higher return on their loans than if the company simply liquidated (Ch 7).

the attorneys must guide the business in a way that will make their repayment plan feasible. This usually means cutting an uprofitbale portion or firing employees or cutting R&D funding or anything that will increase their ability to repay unsecured creditors (secured creditors are set either way - they have a security interest in case the debtor defaults).

the judge oversees the entire process (along with the trustee) to ensure an equitable resolution for creditors and a fresh start for the debtor (boilerplate objectives of the bankruptcy code)
if a trustee or creditor doesn't agree to any part of the plan, then they object to plan confirmation in court and the judge rules on the issue.

large ch 11 make a buttload of money in professional fees. Today we oversaw lawyers taking cuts around $400,000 as part of their 26(!) interim application for fees. prob for this reason, the biglaw attorneys practicing high-level Ch11 bankruptcy seemed quite satisfied, professionally and financially.

So lawyers can get cuts based on the size of the BK (almost like contingency) or lawyers get paid a fee-per-hr only?

[KeepitKind]

lawyers apply for professional fees by their hourly rate and the judge must approve. Also, bonuses are rare and require extraordinary results for them to be approved.

[fathergoose]

Interesting stuff. Not all that much on TLS about bankruptcy from what I've found.

Does your judge have clerks? How would you rank their job satisfaction on a 1 to I-hate-my-life scale?

[SemperLegal]

Used to paralegal for a bk firm, very interested in going pro

[KeepitKind]

Interesting stuff. Not all that much on TLS about bankruptcy from what I've found.

Does your judge have clerks? How would you rank their job satisfaction on a 1 to I-hate-my-life scale?

the clerks seem to enjoy it. the judge says that bankruptcy court should be called "commercial law court" (nice ring to it - kinda sounds like a judge judy show) because of all the different topics of commercial the cases touch upon.

but there isn't the same requirement of high-level writing. in general, bk clerkships are less selective and easier to come by and it seems less prestigious to firms... but if you want to go into bk law specifically, i imagine its invaluable experience for practice. many of the attorneys that come through the court are former bk clerks.

[Veyron]

^ How much writing does BK work entail in general?

[Anonymous User]

On a scale of 1 to I-hate-my-life, how would you rate the professional satisfaction of the attorneys you see in court?

I was on the same floor as the bankruptcy practice group for several years in my prior Biglaw life. The BK attorneys I talked to generally liked what they did (good transactional/lit mix, lots of novel issues, etc.), but they worked CRAZY hours. As in I billed 2500, 2250 and was on pace for about 2400 the year I left (family relocation) during the time we overlapped, and most of them worked noticeably more than I did.

I think a lot of it is the deadlines -- they are a lot more rigid than either general litigation (where extensions are routinely asked for and given) or general transactional work (where closings are routinely pushed back). In bankruptcy court, deadlines are firm and rarely moved, and if you don't reach agreement on a workout deal by those deadlines, the judge decides for you. So it's fairly high pressure, at least time-wise.

All of THAT said, it's probably got some of the best job security around. When times are tough for everyone else, bankruptcy is booming, and when times aren't tough, firms usually won't be laying people off -- they'll just move you to a non-bankruptcy group or give you non-bankruptcy work. Plus it's a pretty transportable skill -- there's demand in most decent-sized markets for bankruptcy attorneys, and the learning curve prevents a lot of non-bankruptcy lawyers from moving over.

[KeepitKind]

^ How much writing does BK work entail in general?

much less than a clerk for a DC. the court proceedings are usually fairly standard, and if there is an issue of first impression the judge will write the opinion after the clerks have researched the issue in some bench memos. (we had an issue of first impression this week based on the possibility of opting out of conduit payments on a mortgage if the debtor has arrearage only on another, separate mortgage according to a novel administrative order).

all in all though, i think the clerkship is less prestigious because not as many ambiguous, difficult issues arise in the cases, but it is still a highly beneficial background for bankruptcy practice.

[Veyron]

^ How much writing does BK work entail in general?

much less than a clerk for a DC. the court proceedings are usually fairly standard, and if there is an issue of first impression the judge will write the opinion after the clerks have researched the issue in some bench memos. (we had an issue of first impression this week based on the possibility of opting out of conduit payments on a mortgage if the debtor has arrearage only on another, separate mortgage according to a novel administrative order).

all in all though, i think the clerkship is less prestigious because not as many ambiguous, difficult issues arise in the cases, but it is still a highly beneficial background for bankruptcy practice.

Thanks. How about for the lawyers.

Thanks for all the info BTW, I'm interviewing for this firm that has a large BK practice and I'm just trying to figure out what kinda stuff my job will entail.

[KeepitKind]

^ How much writing does BK work entail in general?

much less than a clerk for a DC. the court proceedings are usually fairly standard, and if there is an issue of first impression the judge will write the opinion after the clerks have researched the issue in some bench memos. (we had an issue of first impression this week based on the possibility of opting out of conduit payments on a mortgage if the debtor has arrearage only on another, separate mortgage according to a novel administrative order).

all in all though, i think the clerkship is less prestigious because not as many ambiguous, difficult issues arise in the cases, but it is still a highly beneficial background for bankruptcy practice.

Thanks. How about for the lawyers.

Thanks for all the info BTW, I'm interviewing for this firm that has a large BK practice and I'm just trying to figure out what kinda stuff my job will entail.

ya, i see all the lawyer's motion and supporting briefs but I'm obviously much more familiar with the operation from inside the courthouse. most bankruptcy cases will be Ch 7 or 13 for individual debtors and the motions will be nearly form entries provided by the court or dealt with so many times that the lawyer almost just changes some names and numbers. But biglaw firms would have nothing to do with this. biglaw bk attorneys are either fighting for banks/biz's to get money back as unsecured creditors or administering a large corporations bankruptcy. This prob entails a fair amount of research (but less than most other litigators) and writing longs briefs to support your position to the court. All the while determining how to proceed and making deals for the corporation to survive.
Sorry, I know much less about the responsibilities of biglaw bk attorneys but they seem real polished and important when they come to court.

[5110]

I've just finished reading Eat What You Kill and I think the book provides a nice insight into the life of a bankruptcy lawyer (disclaimer: 0L here)

http://www.amazon.com/Eat-What-You-Kill ... 4514&sr=8-

[KeepitKind]

Update: I just ate lunch with two partners at a medium/large firm - one worked in acquisitions/corporate law and the other worked in bankruptcy. The attorney that worked in acquisitions lamented the process due diligence required to analyze every IP agreement, tax issues, and ERISA issues that may arise as part of the employment agreements. He said it takes tens and possibly hundreds of pages to craft the sale contract.

Meanwhile, the bankruptcy attorney said that for the sale of a business through a bankruptcy proceeding it is an all-or-nothing affair and the contract is basically a page. All the IP and such comes along with the sale.

I obviously wasn't on their level in understanding the conversation, but I thought that was an interesting note and really another perk of bankruptcy practice.

[micwrecka45]

any classes besides ones obviously titled "bankruptcy" that would be helpful to an understanding?

[expungemalice]

absolutely. secured transactions is more or less a required course if you want to do bankruptcy work