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Title: President, Chief Executive Officer, Chief Legal Officer Location: Carrollton Age: 39 Table for One Many in-house lawyers work for years to get a seat at the business table. Since his CEO was relieved of his duties and his board of directors resigned on the eve of bankruptcy in November 2004, Michael G. Hoffman has occupied the only seat at VarTec Telecom Inc.’s table. The first lawyer hired by the company in 1992, Hoffman was the last man standing. After helping the company divest of many of its subsidiaries, and mediating between his former superiors and the company’s restructuring advisers throughout 2004, he accepted the offer from controlling shareholder Telephone Electronics Corp. to steer the company through Chapter 11. That was a lucky break for VarTec and its creditors, says Daniel C. Stewart, bankruptcy section head for Vinson & Elkins. “He brought a coherence of [13] years of knowledge of every transaction the company has done, plus a wealth of regulatory experience in this highly regulated industry,” Stewart says. Adam Dunayer, a director with investment banker Houlihan Lokey Howard & Zukin, says Hoffman did a good job bridging the gap between management and outside professionals prior to the filing. And since November 2004, Hoffman has worked diligently toward consensus. That’s not easy, Dunayer says. “Everyone’s mad to begin with. You’re dealing with people who have lost a lot of money,” he says. Stewart says Hoffman’s consensus-building skills were most apparent with his work to determine whether to sell or harvest the business. He weighed the opinion of every constituent and decided to sell, which turned out favorably. ComTel Investment, a unit of Sowood Capital Management, bought VarTec for $82.1 million at auction in July. “We have done as well as one certainly could have hoped,” Hoffman says. VarTec, known for its 10-10 dial-around service, grossed approximately $1.3 billion in 2003. It was an extremely successful, fast-growing, privately held business that just exploded for years, Hoffman says. He was hired at first as regulatory counsel; corporate counsel was an add-on. Within a few years, he had staffed up on regulatory issues and was spending 90 percent of his time on other legal matters. In those healthier times, the legal department averaged 12 lawyers, doing deals and supporting the nimble business. Two of those lawyers remain with Hoffman now. What happened? Hoffman says it was almost a “perfect storm “: A combination of telecom freefall, the de-emphasis on forced competition of the Bells, deregulation that allowed the Bells to compete outside of their regions and the general decline of the long-distance sector. “I knew that there’s no question that we were in trouble when my parents would sit in their kitchen and call me from their cell phone,” he says.

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