Bankruptcy the name of the game in 2009

Bankruptcy litigation news seems to dominate the legal media in the early days of 2009.  The Madoff case involves clawback issues, false trades, etc.  For some good background stories click here, and here and here.

In the Dreier firm bankruptcy case, former Assistant U.S. Attorney Sheila M. Gowan has been selected as the Chapter 11 bankruptcy trustee.  Currently a litigation partner at the boutique firm of Diamond McCarthy, Gowan has an hourly rate of $495, according to an affidavit.   As reported, the 250-lawyer Dreier firm collapsed after the December arrest of the firm’s sole equity partner, Marc S. Dreier, on charges connected to what prosecutors now say is a $380 million fraud.   For details, click here.

Meanwhile, as we have reported in our “Bankruptcy” section (click here) and in a story to post tomorrow (January 5th) in the National Law Journal, Weil, Gotshal & Manges, Sidley Austin, Kirkland & Ellis, Skadden, Arps, and a multitude of other law firms are all gearing up to represent companies in a slew of bankruptcies during the next two years.  A steady rise in corporate bankruptcy filings throughout 2008 is expected to crescendo in 2009 and 2010, with collapses spreading from the retail, auto-related, real estate and financial industries to almost any area affected by the downturn in consumer spending, lawyers in the area say.  As Skadden’s Greg Milmore, the firm’s co-head of the corporte retructuring group, says in the National Law Journal:  “I was the first to prophesy the tsunami.  It’s here.”   While some major companies, such as Lehman Brothers, Tribune Co. and Circuit City Stores filed for bankruptcy protection from creditors in 2008, there are a lot more companies quietly scrambling to set their finances straight in the hopes of avoiding bankruptcies, lawyers in the area say.  While some may succeed, the pipeline of those likely to fail is growing, they say.  The full article can be assessed here.

We’ll have more later this month with our bankruptcy primer and expanded links to bankruptcy news, as well as details on the forthcoming ASOCA bankruptcy law “boot camp” for those of you who want to improve their knowledge of bankruptcy law.