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CHS Electronics did it; so did Tower Air and Unicapital Corp. And just last week Commodore Cruise Line joined the growing chorus of Florida companies that sang the bankruptcy blues in 2000. For lawyers who have enjoyed a booming economy during the past few years, immersed in public offerings, mergers and acquisitions, the slowing economy also means new business. Many have begun to gear up for the anticipated bankruptcy boom and the court fights that often follow when a company begins to crumble. “I definitely think it’s coming. I hate to say great for us if the economy tanks, but it’s true for bankruptcy lawyers,” said Lisa Schiller, a partner at Rice & Robinson, a boutique Miami firm that handles a lot of bankruptcy work. Others already are busy. “We are seeing filings start to mount,” said Scott Baena, a bankruptcy attorney with Bilzin Sumberg Dunn Baena Price & Axelrod in Miami. Indeed, Bilzin Sumberg recognized the need early on for a bankruptcy practice. In August, the firm lured Baena and his bankruptcy group from Stroock & Stroock & Lavan, where Baena had worked for 22 years. It now has eight bankruptcy lawyers, and like many other local firms is looking to grow its bankruptcy practice. “We are right now bulking up our department,” said Thomas Lehman a bankruptcy lawyer with Tew Cardenas Rebak Kellogg Lehman DeMaria & Tague. “We are in negotiations to increase the number of lawyers in our bankruptcy group.” Tew Cardenas has four lawyers in its core bankruptcy practice and two litigators who handle bankruptcy work. Lehman expects that the firm will add a couple more next year. While recruiters in the Miami area haven’t seen a mad dash to hire, “we have seen an indication that they are looking for bankruptcy associates and we expect that will continue,” said Herb Hertner, a legal recruiter. “Nobody wants to be without the manpower to handle it,” added Nina Corn, a legal recruiter with Stone Legal Resources. Through November the number of business-related bankruptcies filed in the Southern District of Florida –which stretches from Indian River County to Monroe County — reached 518. In 1999, the total number filed was 602. But the numbers don’t tell the whole story, said Lehman, who handled the bankruptcy of CHS Electronics and Beverage Canners International. “It’s not the number, it’s the size of the case and whether it’s a viable operating business,” he said. For example, Beverage Canners, a Miami-based bottled water distributor, had $10 million in assets and owed about $28 million when it filed for Chapter 11. Unicapital Corp., an airplane and equipment leasing company that filed for Chapter 11 bankruptcy protection last month, reported losses in the first half of last year that topped $250 million. Though newspaper headlines have been screaming about the failing dot-com industry, bankruptcies are not necessarily the kind of work that lines lawyers’ pockets, and many won’t even touch those cases. “We wouldn’t put our name on the case unless we think there is a substantial chance that the company will be reorganized,” said Schiller. “You will see an increase in dot-com bankruptcies, but the volume of business they generate is not material,” said Paul Singerman, a bankruptcy attorney with Berger Davis & Singerman. “In the usual case, there’s not a lot to reorganize. What you might find is an increase in assignment for the benefit of creditors, which is a state court procedure,” he said. Others see opportunities in trying to help companies as they teeter on the edge. “If you have a client in a precarious position, there are various alternatives to bankruptcy out there,” said James Silver, who was hired by Feldman Gale & Weber in March to handle bankruptcy work and complex litigation. “They do a lot of intellectual property work and high-tech representation, and given the volatility in those areas, Feldman Gale & Weber saw the need for a bankruptcy capacity, not only for when actual bankruptcies are filed, but for dealing with bankruptcy issues in advance,” Silver said. For now, lawyers are looking at a booming bankruptcy business across the board. “Any capital-intensive company is probably feeling it right now because they are being squeezed between decreasing consumer demand and decreasing capital,” he said. “I think we will cut a large swath through the commercial sector,” Baena said.

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