US firms target European and mid-market bankruptcies as US mega-insolvencies draw to a close
The era of the billion-dollar bankruptcy is finally drawing to a close, with US law firms now focusing on mid-market collapses to sustain profits.
According to a survey conducted by The Daily Deal magazine, Dallas-based Winstead Sechrest & Minick topped its chart of active bankruptcies with 155 ongoing cases for the period ended 31 October.
While the firm is acting on the bankruptcy of collapsed energy trader Enron, its number one ranking has been sustained by a continuing flow of restructuring mid-market companies.
Former number one-ranked firm Weil Gotshal & Manges, which has handled some of the largest US collapses in the past two years, including Enron and Global Crossing, slipped into fourth place with 117 cases.
However, the firm’s high-profile role as debtor’s counsel on WorldCom, in which it advised the company on 221 separate filings, is counted as a single case.
Kirkland & Ellis, which has also secured a number of billion-dollar bankruptcies, ranks on a par with sometime referral firm Pachulski Stang Ziehl Young Jones & Weintraub, with 68 cases. The firms are working on the Chapter 11 reorganisation of Cable & Wireless America together.
Individually, though, Kirkland’s prolific bankruptcy partner James Sprayregen is involved in 42 cases, beating Weil Gotshal rainmaker Martin Bienenstock, who ranks with 27.
The overall perception in the US market is that, with the fall-off in huge bankruptcies, creditors are now able to focus on smaller businesses facing financial difficulties.
The research also points to Europe for cross-border cases as a fertile stamping ground for fee-hungry US law firms. In terms of sectors, steel, airlines, energy, healthcare, natural resources, auto supplies, textiles, real estate investment trusts and retail all look set to offer up more casualties.