The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Jeff Michalik and Aparna Yenamandra, Partners—Restructuring
Jeff Michalik is a restructuring partner in the Chicago office of Kirkland & Ellis, where he represents debtors and creditors in a variety of complex in- and out-of-court restructuring matters. Jeff received a B.S. in Psychology (with Honors) from Loyola University Chicago and graduated magna cum laude from IIT Chicago-Kent College of Law. Jeff was a summer associate at Kirkland in 2016, returned as a full-time associate in the restructuring group after graduating from law school in 2017, and recently made partner in fall 2023.
Aparna Yenamandra is a restructuring partner in the New York office of Kirkland & Ellis. She advises companies and creditors with investments in distressed companies across a host of industries, including oil and gas, retail, and software. She advises companies in connection with chapter 11 filings and out-of-court deleveraging solutions and creditors in connection with distressed investments and sale transactions. Aparna received her Bachelor of Arts in Economics and Political Science from New York University and her J.D. from Villanova University Charles Widger School of Law.
Describe your practice area and what it entails.
Jeff: Restructuring encompasses a huge range of cases and transactions. The common thread is usually some level of distress—whether that’s too much debt, a liquidity crisis, burdensome litigation, operational inefficiencies, or a combination of the above. When a company enters a distressed situation, a debtor lawyer needs to be the steady hand, applying experience and creative solutions to a situation where the client has little experience, multiple stakeholder groups are at odds, and tensions are extremely high.
Aparna: Restructuring is a dynamic practice that has both transactional elements and litigation elements. Among others, we represent companies, creditors of distressed companies, and funds looking to potentially invest in the distressed space. Our practice is primarily focused on deal-making and contingency planning to allow companies to either avoid a chapter 11 altogether or ensure their stay in chapter 11 is as expeditious and successful as possible.
What types of clients do you represent?
Jeff: The fortunate/unfortunate reality is businesses all over the world are potential restructuring clients. It makes for a very diverse practice. For example, I’ve split days between representing a U.S.-based women’s clothing retailer and a U.K.-based offshore drilling company. I’ve also represented oil and gas companies, energy infrastructure and engineering companies, a “safety net” hospital company, a paper company, a chemical manufacturer, and even a Croatian grocery store chain.
Aparna: In the U.S., our practice is approximately 75-80% company side and 20-25% creditor/investor side. In London, Munich, and Hong Kong, it is the reverse, although our offices in the U.S. and internationally are fully integrated. We represent the largest and most complex clients and are industry agnostic. During my time at Kirkland, there have been waves of restructurings in various industries: oil and gas, retail, telecom, health, and most recently, crypto. Among other large clients, we have represented Rite Aid, Intelsat, J.C. Penney, and Energy Future Holdings.
What types of cases/deals do you work on?
Jeff: We typically work on deals that range from out-of-court liability management to comprehensive in-court restructurings and everything in between (including out-of-court restructurings and refinancings).
Aparna: As a group, we largely prepare companies for an expeditious stay in chapter 11. We work hard to negotiate consensus with as many creditor constituencies as possible, but we are prepared to litigate where necessary. We advise companies on out-of-court deleveraging transactions (e.g., a debt-for-equity swap, an amendment and extension of debt facilities, and/or sale transactions). I’ve spent much of my time with Kirkland on Energy Future Holdings, which was the third-largest operational filing in history. Since then, I have worked on several high-profile matters. Across all these representations, I have touched a range of industries, creditor constituencies, and complex and novel implementation and structuring issues.
How did you choose this practice area?
Jeff: Nobody grows up thinking they want to be a restructuring lawyer; I found this practice area essentially by accident. My 1L summer, I knew I wanted to extern with a judge. I ended up with an offer from a bankruptcy court despite a lack of prior experience or interest in the field. My first day on the job, the judge’s clerk gave me a crash course in “everything you need to know about bankruptcy law,” and it immediately clicked. I was hooked, and I never really looked back.
Aparna: I liked that restructuring has a mix of litigation and corporate elements and that we can help companies during what is typically a high-stress time for them. The job is equal parts classic IQ and strong EQ, as we are advising tier one management teams at a pivotal time in the life of their companies. Helping to reorganize a company, stabilize its operations, save jobs, and “keep the lights on” is hugely satisfying. There are real people with real jobs and livelihoods that depend on a successful restructuring outcome, and that is both humbling and rewarding. I also appreciate that the practice affords an opportunity to both sit at the negotiating table and present arguments in court, providing a very comprehensive experience.
What is a typical day like and/or what are some common tasks you perform?
Jeff: No two days are the same in restructuring, but it’s always a mix of Zoom meetings and phone calls, a healthy dose of email, and drafting/revising of memos, pleadings, letters, etc. Restructuring lawyers at Kirkland are both transactional lawyers and litigators; you could finalize a Transaction Support Agreement and then stand up in court to defend it in front of a judge that same day.
Aparna: I have been at Kirkland for just over 11 years; a typical day for me at this stage is a mix of fielding questions from a senior management team and board members, navigating complex deal or litigation issues both internally with other Kirkland practice groups or with creditor constituencies, and, as needed, preparing for court. I am also constantly staying in communication with my co-advisors (within and outside of Kirkland) to ensure that we are working together as cohesively as possible.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Jeff: I’d always recommend Bankruptcy, Secured Transactions, Business Organizations, and some form of tax, which is relevant to every practice area. Experience-wise, you can get a ton of value from sitting in a bankruptcy court and watching a judge field their way through a day’s docket. You’ll get a feel for how pragmatic bankruptcy and restructuring lawyers must be when they’re working through complex legal issues with real-world (often urgent) consequences.
Aparna: While in law school, take a broad base of classes touching on business organizations, evidence, federal tax, accounting, trial advocacy, and legal writing. A secured transactions class may also be helpful to understand bankruptcy basics. An opportunity to clerk with a bankruptcy judge could also be beneficial to understanding restructuring from the bench’s perspective. All that said, Kirkland offers a wealth of training sessions on key topics, and nothing beats on-the-job training.
What is unique about your practice area at your firm?
Jeff: Kirkland’s restructuring group is heavily debtor focused, which is rare in BigLaw. You’ll find yourself working on a wide variety of matters for clients in an array of industries—ideally, never with the same client twice. It contributes to an atmosphere where you’re always learning, and you’re almost always working to save companies and jobs. It adds a layer of real-world significance and opportunity to make a difference in people’s lives that isn’t prevalent in most other areas or firms in BigLaw.
Aparna: Kirkland’s restructuring practice is a young, highly energized group that has grown quickly and continues to grow but retains a small group feel. The group leaders are laser focused on ensuring that young lawyers have opportunities as early as possible, maximizing the group’s diversity, and encouraging a healthy work-life balance. Our cases are generally staffed leanly, reducing the layers between the senior partners and most junior associates, providing ample opportunity for more substantive work earlier.
How do you see this practice area evolving in the future?
Jeff: In the time I’ve been at Kirkland, we’ve seen a rapid rise in liability management transactions. I think we’ll see a continued increase in these types of deals where companies work together with a supportive group of their stakeholders earlier in the process to maximize the going-concern value of the company by injecting crucial liquidity to extend runways or bridge to orderly restructuring processes.
Aparna: Ten years ago, this was a relatively small industry somewhat unprepared for the waves of restructurings necessitated by technological advances and, most recently, COVID. As restructurings become more commonplace, I think companies will increasingly see deleveraging as a positive rather than focusing on the negative press of a chapter 11. This will hopefully facilitate companies approaching restructuring professionals earlier, increasing the likelihood of out-of-court solutions.
What kinds of experience can summer associates gain in this practice area at your firm?
Jeff: Summer associates can expect to work directly with practicing restructuring attorneys on active client matters. In addition to substantive work, there are a ton of shadowing opportunities where summer associates will get a front-row seat to the top lawyers doing some of the best restructuring work in the world.
Aparna: Shadow, shadow, shadow! The best way to know if you want to be a restructuring lawyer is to see what we do. Summer associates should take advantage of every opportunity to sit in on calls, go to bankruptcy court hearings, go to bankruptcy settlement conferences, and familiarize themselves with what key bankruptcy documents look like. They should also spend time with associates and partners at different levels. For me, it was key to spend time with (and shadow) junior associates, senior associates, income partners, and share partners to see if I could see myself doing their job one day.
What advice do you have for navigating the multidisciplinary nature of bankruptcy practice?
Jeff: Always ask questions and be hungry to learn. Give yourself the opportunity to succeed by trying to understand the “why” of what you’re working on and where it fits into the broader deal. That’s not easy to do, and it takes time. But if you commit to that, it’ll make you a better lawyer today than you were yesterday.
Aparna: Learn from your peers in other practice groups: the goal is not to become an expert in other practice groups, but to be able to spot issues that other specialists should weigh in on. I consider myself a little bit of a tax, debt, capital markets, and litigation expert, to an extent where I know when to raise my hand and ask for help from the experts. Being at the center of it all is an exciting and perfect way to learn what everyone else does.