Insolvency teams getting restless as predicted bankruptcies fail to appear
Let us hark back to the end of 2006 - the Dow is soaring, credit is flowing freely, and default rates are at historic lows. Far from cursing its luck, the corporate restructuring group at Skadden Arps Slate Meagher & Flom is running at full tilt. Partners juggle at least four multibillion-dollar bankruptcies between them, including Delphi and Refco, requiring them to deploy battalions of lawyers simultaneously in several states. Over 14 months, Refco alone had 20 partners billing more than 200 hours and generating $43m (£21.9m) in fees for the firm.Eighteen months later, the economy is in the tank, business bankruptcies are up nearly 50%, and Skadden's bankruptcy lawyers are talking about the good old days. "We have been lucky enough to generate some smaller matters," says partner DJ Baker. "But you cannot just replace a Refco or a Winn-Dixie with a couple of smaller cases in terms of keeping people busy."
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