Bankruptcies have skyrocketed because of the pandemic, and so have the caseloads of bankruptcy attorneys.
And while some firms were ready for the increased demand, others are having to scramble.
“Law firms have always counted on bankruptcy as a countercyclical practice in hard times,” writes Samantha Stokes for Law Journal Newsletters. “Now, those that prepared when the economy was booming may be about to get their reward. A number of law firms have been shoring up their bankruptcy and restructuring groups over the past two years, anticipating a surge in work as a cyclical economic downturn loomed on the horizon but never materialized. As the coronavirus outbreak has shut down much of the world and tanked the economy seemingly overnight, they are poised to be busier — perhaps far, far busier — than expected.”
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A leading indicator of the surging demand in bankruptcy law is the recruiting battle being waged for top bankruptcy law talent. From Law Journal Newsletter:
“In 2019, there were 550 lateral moves involving bankruptcy and restructuring attorneys, according to ALM Intelligence data tracking U.S.-based partners, associates and of counsel joining Am Law 200 firms. That was an increase from 413 such moves in 2018 and 364 in 2017. Since 2017, the list of firms with the largest number of bankruptcy hires has included Kirkland & Ellis; Baker McKenzie; Akin Gump; Sidley Austin; and King & Spalding, according to ALM data.”
The New York Times called clothing giant J. Crew the “first major retail casualty” of the pandemic when the clothing giant filed for Chapter 11 bankruptcy in May 2020. Here are some of the major companies that have also filed for bankruptcy in the past five months:
- Diamond Offshore and Whiting Petroleum
- Gold’s Gym
- Neiman Marcus
- J.C. Penney
- Tuesday Morning
- PQ New York
- 24 Hour Fitness
- Chuck E. Cheese
- Lucky Brand
- Brooks Brothers
- Sur La Table
- New York & Company
- Ann Taylor and Lane Bryant
- California Pizza Kitchen
- Lord and Taylor
- Men’s Wearhouse
- Virgin Atlantic
Source: New York Magazine
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