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LEGAL REPORT: INSOLVENCY them by banks, investors, or creditors, whether they were being helped through a restructuring or liquidation. But it all changed in a heartbeat. Even though Canadian financial institutions survived relatively unscathed, unlike many of their U.S. counterparts, both the availability of credit and the market was gone. "If I was going to liquidate or use a court process to find a buyer or strategic investor, there was no market. Nobody could put a value on businesses and assets, things were continually going down," he says. Fogarty says insolvency, business, commercial lending, and M&A lawyers had a responsibility to do what they could to keep businesses going, even though they didn't have access to a lot of capital themselves. He says insolvency proceedings are still extremely import- ant but they are also time-consuming and costly. "There had to be a way for people to try to find solutions without having to go through a protracted insol- vency proceeding. [Then] you saw law- yers and business people working with creditors to come up with solutions that were outside of the courts or coming to the court as a last resort as opposed to using the court as the starting point of the process." A good example is the bankrupt- cies and bailouts of General Motors and Chrysler last year, he says. "A lot of the negotiations and tough things that occurred in those files happened way before they went into the formal process. They were all negotiated way ahead of time. It was a quick in-and-out process." Lewis Kruger, a New York-based partner at Stroock & Stroock & Lavan LLP, agrees and says lawyers who deal with distressed companies have been "extremely busy" the last couple of years. "It has been an all-out work effort to restructure, recapture value, and pre- serve value," he says. "Lawyers have played major roles in trying to assist companies [that] are struggling through the downturn, such as General Motors and Chrysler, just to name a couple. There was a lot of business attention paid to them but a substantial amount of law- yerly attention, too. The lawyers' roles in those cases were crucial to preserving the economic entities, preserving jobs, and preserving value for creditors." Kruger says a number of lawyers have left the practice of law to become financial advisers to financially troubled companies or they have become invest- ors, of both their own money and that of others, in the debt and securities of distressed companies. He says he's not anticipating a rash of lawyers applying to MBA programs to build their skill set — although he says he knows a num- ber of people who have degrees in both disciplines. "Those that are experienced in the insolvency field and who remain as lawyers develop, over time, a sense of business. When you're dealing with troubled companies, you see a lot and you learn a lot. The next time, you can offer a combination of legal advice with some sound business advice," he says. 46 JUNE 2010 www. C ANADIAN Law ye rmag.com ntitled-5 1 5/21/10 12:13:05 PM