While the bankruptcy of Lehman Brothers may be grim tidings for the U.S. economy, it is a veritable gold mine for bankruptcy powerhouse Weil, Gotshal & Manges.
Harvey R. Miller, 75, who has handled some of the highest-profile bankruptcy cases in U.S. history, is heading the Weil Gotshal team overseeing the likely liquidation of about $639 billion in assets for the nation’s fourth largest investment bank.
That is almost six times larger than any previous Chapter 11 case. The next-biggest case, which was also handled by Weil Gotshal, involved WorldCom, the telecommunications company which went under in 2002 after an accounting scandal, with $104 billion in assets.
Miller was the lead bankruptcy attorney for Drexel Burnham Lambert Inc., the last major investment firm to seek protection from creditors almost 20 years ago after turmoil in the junk-bonds market.
Over the course of more than 30 years at Weil Gotshal, Miller built the business finance and restructuring department from just a handful of attorneys to more than one hundred. The firm was involved in the defining cases of the 1980s and 1990s, involving Enron, Worldcom, Global Crossings, Texaco, and Continental Airlines.
“They’re the firm to go to in major cases because of their experience,” Andrew Rahl, co-head of bankruptcy at law firm Reed Smith LLP told Bloomberg News.
But this time round, the firm got the job at a time when some were asking whether it bankruptcy practice “was losing its edge,” according to the AmLaw Daily.
The firm has seen a series of bankruptcy partner departures in recent years. Man of the hour Harvey Miller himself left in 2002 for investment bank Greenhill & Co., Inc., only to return last year.
Another defection was of Martin J. Bienenstock, who had been lead counsel on the liquidation of Enron, who recently left for Dewey & LeBoeuf. Ironically, Bienenstock will be on the other side from his old colleagues, representing several of Lehman’s creditors, according to Bloomberg News.
Miller told the New York Times last year after his decision to return to Weil Gotshal that for him, practicing law was more rewarding than making deals – albeit less lucrative.
“There’s a lot of adrenaline that runs in those situations,” he said. “And when you’re successful — although you’re not always — it’s very gratifying, and more so than when you close a deal.”
“Life should be an adventure,” he said.
And the rewards are not inconsequential.
Fees for lawyers, accountants and financial advisers in the Lehman case could reach as high as $906 million, Lynn LoPucki, one of the top bankruptcy experts in the U.S. told Bloomberg News.
Enron in December 2004, three years into its bankruptcy case, asked a judge to approve more than $780 million in fees for advisers. Weil Gotshal alone requested almost $164 million, and was paid $149.4 million. About $7.6 million was billed for work by the firm’s co-lead lawyers on the case, Bienenstock and Brian Rosen.
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