The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Lauren Bilzin is a partner in the restructuring department and a partner in the hybrid capital and special situations finance practice. She focuses on distressed investments and liability management transactions, advising sponsors, investors, issuers, and creditors on a broad range of sophisticated and bespoke debt, equity, and hybrid capital solutions. Lauren earned her B.S. from Duke University and her J.D. from Yale Law School.
Co-head of Paul, Weiss’ restructuring department and a member of firm management, Brian Hermann handles a wide range of restructuring matters for both debtor and creditor clients. He has extensive experience representing clients in complex out-of-court restructurings and Chapter 11 cases nationwide. Brian has led major restructurings of companies representing many industries, including the sports, music, media, telecommunications, energy, retail, and industrial sectors. Brian earned his B.B.A. from Pace University and his J.D. from UCLA School of Law.
Describe your practice area and what it entails.
Brian: Restructuring is really a mix between corporate and litigation. You’re dealing with a company that is in some form of distress. Think of it as a sick patient; you don’t have endless time to come to a solution. Multiple parties are involved, and everyone is trying to get to a deal to fix the company. If it’s a Chapter 11 case, you’re negotiating a deal with court supervision, so there’s a litigation component. Even though restructuring requires specific expertise, it touches many areas of law, so you have to be a generalist as well.
Lauren: My work is more at the intersection of restructuring and finance. I work with all the constituencies of a company in distress—for example, if there’s a need for available liquid capital, a large chunk of their debt is facing a repayment deadline, or they’re facing market pressures. A big part of my practice is figuring out if there’s an out-of-court solution and executing a transaction to help the company through difficulties.
What types of clients do you represent?
Brian: Many firms either represent companies that are going through restructuring: the debtor companies or the creditors, the parties owed money by the companies. Our practice is a balance of both. Recently, for example, we represented 23andMe, Diamond Sports Group, Enviva, Forever 21, Mitel Networks, Party City, and Rite Aid in their Chapter 11 bankruptcies and handled significant out-of-court restructurings for MSG Networks and Xplore. We represented key creditor groups in the restructurings of AMC Entertainment, Dish Network, Saks Global, Serta Simmons, and many others. We also represent parties that buy companies in distress.
Lauren: I represent a broad range of financing providers, including traditional private equity sponsors, large mutual funds, and hedge funds. My clients include my previous employer, Davidson Kempner. All of the larger funds interact with our group in different ways. If they have a portfolio company that’s not performing well, they might be looking to explore a restructuring. Alternatively, if market fluctuations present opportunistic ways to get a discount or to raise money, we can proactively explore alternatives that can avert, or at least mitigate, the negative consequences that may happen if there is a fulsome restructuring.
What types of cases/deals do you work on?
Brian: My practice spans all the major parties in restructuring. I recently represented Diamond Sports, the largest regional sports network in the country, in its successful restructuring. On the creditor side, I’m currently representing a group of lenders to Serta Simmons, the mattress giant, that was excluded from a debt restructuring deal and won a major victory on appeal. Now we’re back in the bankruptcy court for trial. I also advised a group of lenders to AMC Entertainment in connection with its recapitalization.
Lauren: Brian and I worked together on the AMC transaction, which is a great example of the successful intersection of restructuring and the financing elements that are my specialty. What started as something with a litigation posture and a potential bankruptcy ended up with our clients exchanging their debt for new bonds in a really productive transaction.
How did you choose this practice area?
Lauren: I started in tax right out of law school, but as a junior attorney you usually have a peripheral role in a large transaction led by other departments. When I was looking at other practices, the restructuring and finance groups seemed to have the broadest mandates. I liked that I didn’t have to choose between something litigation or corporate focused because restructuring can be both. I ended up loving it. At Davidson Kempner I was head of restructuring, but that only partly described what I did, and I ended up working on any of the firm’s positions that involved debt modification, which was great preparation for the interdisciplinary nature of my current practice. This crossover between restructuring and finance, as in the hybrid capital and special situations practice, has really taken off across the industry in recent years because they’re so intertwined.
Brian: I worked on Wall Street before going to law school. I thought I wanted to be an M&A lawyer, but as a summer associate, I did a rotation in restructuring and enjoyed it. So I followed my gut. At that time, not that many people went into the practice, and most of the bankruptcies were handled in court; today, many are handled out of court.
What is a “typical” day like and/or what are some common tasks you perform?
Lauren: My days are heavily focused on client work—a multifaceted process that goes beyond the matters on my plate at any given time. In an active deal, a lot of time is spent managing the deal flow and making sure things are moving: reviewing documents and checklists, delegating tasks, guiding junior colleagues, and so on. But client work goes well beyond active transactions and involves developing and strengthening relationships through client calls or meetings, as well as regularly exploring market or regulatory trends with colleagues or external partners in finance, capital markets, and other areas to identify developments that may affect our clients down the line. I also spend a lot of time working with junior attorneys helping them learn about the life cycle of a transaction, develop their skills, and build their professional networks.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Brian: I’ve always believed that, as a young lawyer, your main goal is to learn good lawyering skills; the practice you may choose is secondary. If you know you’re interested in restructuring, take a Restructuring class and perhaps a Secured Transactions or Commercial Law class so you understand basic terminology and concepts. But I don’t view anything as a prerequisite. There are things that are helpful to have, but if you don’t have them, you’ll learn on the job.
What misconceptions exist about your practice area?
Brian: There’s a misconception that it’s a narrow, specialized practice because there’s an idea that you’re wedded to the Bankruptcy Code and to a defined body of case law, but it’s really one of the last great generalist practices in a BigLaw firm. You’re exposed to a whole universe beyond the Bankruptcy Code. You handle multiparty transactions with different groups that each have different perspectives and motivations. You’re exposed to litigation components and transactional components, you’re working both in and out of court, and you’re touching multiple areas of law in a particular restructuring.
Lauren: Another misconception is that there’s a zero-sum game in some of these situations. There are instances of creditors turning against each other, but as more capital providers have come online and more dispersed groups are providing money, there are opportunities for creativity and flexibility in finding capital solutions that benefit all parties.
What is unique about your practice area at your firm?
Brian: There aren’t many firms with the balanced mix of debtor and creditor work that we have. The founder of the practice, Alan Kornberg, was a big believer that a Paul, Weiss bankruptcy lawyer should know how to do anything that comes in the door that’s restructuring related—debtor, creditor, in-court, out-of-court, litigation, and transactional. That’s how most of us were trained, and that’s how we continue to train our associates today. As a result, we’re very comfortable taking on different roles in a restructuring.
I’d also say that we are a super-collegial, tight-knit team. We truly enjoy practicing together, and we are deeply committed to mentoring our junior team members.
Lauren: As Brian says, the restructuring practice is very collegial, so even though hybrid capital and special situations is a relatively new practice area, created out of a recognition that the traditional streams of financing have changed, it’s been integrated really well into the overall practice group. It has added a new dimension and new alternatives to the traditional restructuring path, allowing clients to explore alternative financing solutions not available in a classic restructuring.
What are some typical tasks that a junior lawyer would perform in this practice area?
Brian: Junior attorneys do a lot of the same work in our practice as in other practice areas, such as researching and writing sections of briefs and helping to draft agreements. Because our practice is a mix of transactional and litigation work, they get to have meaningful input on a wide variety of assignments. They work hand in hand with the senior lawyers they shadow and interact closely with clients and develop relationships with them. They are also tasked with keeping track of workflow and assignments, which for some of the massive, sprawling matters we work on, is a crucial responsibility.
What advice do you have for navigating the multidisciplinary nature of bankruptcy practice?
Lauren: As Brian says, restructuring matters touch many different areas, and many different circumstances arise. No one person could ever be an expert in each type of company or firm that may hire you. It’s powerful to know what you don’t know and not to be afraid to ask questions. We’re a close-knit and mutually supportive practice here at Paul, Weiss, so I encourage junior attorneys not to be embarrassed about asking questions and to have an open mind.
Brian: To be a good restructuring lawyer, you have to be able to react quickly and pivot where necessary. It’s a bit like football: You can plan for a lot of things, and then things happen that are unplanned, and you have to be able to react and adjust the play or call another play. So the people who do it well tend to be those who can do multiple things at one time and be quick on their feet.