The Financial Restructuring and Distressed Opportunities Panel featured Peter Antonszyk, Mitch Appelbaum, Chris Updike, and  Roy Messing from Proskauer Rose, Wilmerhale, Cadwalder and FTI Consulting, respectively. The Panel was moderated by Frederick Tung, Professor at the Boston University School of Law.

Unlike most transactions, where all parties profit to varying degrees, bankruptcy differentiates itself in that all parties will suffer some loss from settlement. Thus, Messing described a bankruptcy as one part corporate consulting, and one part bar fight. One had to have a thorough understanding of financial statements, and of financial engineering techniques. But, one also had to realize that all parties were engaged in a game of bluffing and maneuvering, and that while no party wished to avoid settlement, all parties wished to gain leverage to achieve the best settlement.

Indeed, all panelists agreed that negotiation skills were paramount, given the high acrimony and emotion in a Bankruptcy proceeding; Antonszyk mentioned Fisher’s “Getting to Yes” as a principle text.  Applebaum iterated that interpersonal skills were also necessary in dealing with the firm that hired you. In many situations a bankruptcy attorney must convince key individuals of the harsh reality of the financial situation. As a bankruptcy attorney represents the estate, rather than the company or individual which hired him, he must also toe the line between the interests of his pay master and of the estate, especially when considering risk.

Finally, the panelists emphasized that Bankruptcy has changed a great deal over the last two decades. Whereas previously the borrowers in a bankruptcy proceeding were almost exclusively banks, the increased availability of non-bank sources of credit, coupled with regulation intended to expedite proceedings, has drastically modified current bankruptcy regimes.

Written by Andrew Kostrzewa