Kirkland partner Josh Sussberg spoke with Turnarounds & Workouts regarding the Firm's restructuring practice.
Between 2019 and 2021, a total of 257 companies with at least $100 million in assets sought creditor protection under Chapter 11 of the Bankruptcy Code. About 38% of these companies — roughly 2 out of 5 — tapped either Kirkland & Ellis LLP, Weil Gotshal & Manges LLP, or Latham & Watkins, LLP as their lead counsel, according to data provided by Troubled Company Reporter and Troubled Company Prospector editors.
Kirkland emerged as the top go-to firm during this three-year stretch. The Chicago-based firm acted as lead counsel in 58 large cases, involving $190 billion in combined assets. Weil Gotshal was second with 27 cases, representing $117 billion in combined assets. Latham & Watkins, third, was retained as lead counsel in 16 mega cases, with a combined $29.5 billion in assets.
TCR and TCP data also show that 78 law firms were retained as lead counsel in at least one large Chapter 11 case during this period. The 257 large cases represent roughly $530 billion in combined assets. The data tracks firms serving as lead counsel to debtors and doesn’t include local counsel engagements nor hirings by statutory committees.
In addition to Kirkland, Weil and Latham, Davis Polk & Wardwell LLP and Skadden, Arps, Slate, Meagher & Flom were each named as lead counsel to debtors in seven Chapter 11 mega cases during the three-year period, tied for the fourth spot. Pachulski Stang Ziehl & Jones LLP and White & Case LLP each had six, taking the fifth spot.
In terms of asset size, White & Case LLP represented Chapter 11 debtors as lead counsel in six cases with a combined $29.1 billion in assets. Cleary Gottlieb Steen & Hamilton LLP served as lead debtor counsel in four cases with a combined $25.4 billion in assets, to take the fifth spot.
Last year, 16 of the large Chapter 11 debtors registered at least a billion dollars in total assets (for a total of $44.7 billion). Kirkland served as lead counsel to five of those debtors, with a combined $16.5 billion in total assets. Its clients include offshore driller Seadrill Limited ($7.3 billion in assets), mall operator Washington Prime Group Inc. ($4 billion in assets) and department store chain Belk, Inc. ($3.1 billion in assets), which was in and out of bankruptcy within 24 hours.
Weil was named as lead counsel to debtors in Basic Energy Services, Inc. ($331 million in assets) and ORG GC Midco, LLC (est. $100-$500 million in assets) in 2021. Latham guided Sundance Energy, Inc., ($450 million in assets) and Nine Point Energy Holdings, Inc. ($184 million in assets). Cleary and White & Case snagged three cases each that year. Cleary was hired in Alto Maipo Delaware LLC ($3.1 billion in assets); Automotores Gildemeister SpA ($674 million in as-sets); and Grupo Posadas S.A.B. De C.V. ($498 million in assets). White & Case worked on PWM Property Management LLC ($2.2 billion in assets); Strike, LLC ($326 million in assets); and Alpha Latam Management, LLC ($279 million in assets).
This year, Weil is lead counsel in two cases, tied with Paul, Weiss, Rifkind, Wharton & Garrison LLP for most number of engagements. Weil is working on Talen Energy Supply, LLC (est. $10 to $50 billion in assets); and Ruby Pipeline, LLC ($648 million in assets). Paul Weiss is lead counsel to Revlon, Inc. ($2.3 billion) and Footprint Power Salem Harbor Development LP ($1.03 billion).
Earlier this year, Kirkland led the restructuring of Seadrill New Finance Limited, an affiliate of Seadrill Limited, with an estimated $500 million to $1 billion in assets and $535 billion in secured debt. SNF obtained confirmation of its Chapter 11 plan of reorganization within 24 hours after the bankruptcy filing.
Latham is lead counsel to MD Helicopters, Inc.($203 million). White & Case is lead counsel to GT Real Estate Holdings, LLC (est. $100 to $500 million in assets).
Josh Sussberg, a partner in Kirkland’s Restructuring Practice Group and member of the firm’s Executive Committee, tells Turnarounds & Workouts, “We are proud to say that we consistently achieve favorable results for our clients, often in precedent setting cases that define the market.”
“While we get a lot of press for leading many of the largest and most complicated in-court restructurings (e.g., JCPenney, iHeart, Caesar’s, Toys R Us, Intelsat, Seadrill, United Airlines, TXU/Energy Future Holdings etc.), what many people do not realize is that for every one of those there are many more where we quietly and discretely help the company steer clear of trouble out of court (e.g., Macy’s, Petsmart, Envision, etc.),” according to Sussberg.
Meanwhile, Caroline Reckler, Chicago Local Finance Department Chair and partner in Latham & Watkins’ Global Restructuring & Special Situations Practice, shares, “Latham’s market presence in representing debtors in Chapter 11 mega-cases stems from two key qualities: high-caliber restructuring experts plus cross-disciplinary and industry excellence and collaboration.”
“But simply having a top-flight [Restructuring & Special Situations] group is not sufficient to advise a large business through Chapter 11: it takes teamwork with a wide cross-section of talented lawyers in other practice areas and industry expertise. That is the reality of a mega-case. We in the R&SS group get amazing support from our colleagues that are true leaders in their own fields, especially from our Bank Finance, Transactional Tax, Capital Markets, Mergers & Acquisitions, and Public Company Representations groups, as well as our Complex Commercial Litigation and White Collar Defense & Investigations groups when we are in litigious bankruptcies.”