February 7, 2011 6:00 AM
Dewey Brings On Ten Lawyers from L.A. Boutique
Posted by Brian Baxter
Best known for steering Orange County, Calif., through one of the largest municipal bankruptcies in U.S. history, Bennett, 52, brings more than two decades of experience to Dewey's L.A. office. He and nine other Hennigan Bennett attorneys are officially joining Dewey on Monday.
The group consists of Hennigan Bennett partners James Johnston, Sidney Levinson, Bennett Murphy, Joshua Mester, and Joshua Morse; counsel Monika Wiener; and associates Jason Wolf, Alek Strygin, and Michael Schneidereit. All will be based in L.A., except Morse, who will work out of San Francisco.
The move is motivated by an increasing need to offer clients services other than bankruptcy and litigation counsel, says Bennett, pictured above. He points to tax and corporate issues within large-scale restructurings as examples of areas that Hennigan Bennett typically calls on outside counsel to handle. At Dewey, the plan will be to keep it all "under one roof," Bennett says.
For Dewey, the hires will help push the firm into the upper echelon of national restructuring practices and add more strength to a "deep bench" of bankruptcy expertise, according to Martin Bienenstock, leader of the firm's business solutions and corporate governance group.
"This enables us to provide the same or better level of excellence that a Kirkland or Weil can provide in the reorganization area," Bienenstock, pictured left, says. "This is just a tremendous combination."
Given the moves, Bennett's former firm will change its name to Hennigan Dorman. Name partner and cofounder J. Michael Hennigan, 67, who heads the firm's complex litigation practice, describes Bennett's departure as "bittersweet."
Hennigan and Bennett knew each other from the roles they each played in the Orange County bankruptcy in the mid-1990s. The two joined forces in 1995, leaving their respective firms--Hennigan was at a predecessor firm of Howrey, while Bennett was practicing at L.A. bankruptcy boutique Stutman Treister & Glatt--to found Hennigan Bennett in May of that year.
Bennett describes the opportunity to join Dewey as "unexpected" and says the process played out in recent months through an intermediary who brokered the move. Bennett declined to identify the individual or discuss whether he used a legal recruiter for the move. Bienenstock says that a friend of a partner in Dewey's L.A. office approached him about the possibility of bringing on Bennett and his group. It helped that Bennett knew Bienenstock, as well as several other Dewey partners, including litigation partner Alan Salpeter in Chicago and global insurance cohead William Marcoux in London.
Bennett will bring a number of high-profile matters to Dewey's business solutions and corporate governance group, including a piece of the Tribune Company bankruptcy. Bennett represents a group of hedge funds that hold almost $5 billion in senior loans to the nation's second-largest newspaper publisher. Other Bennett clients include a group holding almost $4 billion in Lehman Brothers debt.
Dewey hopes that a bankruptcy presence in L.A., while not generally considered a hotbed of restructuring activity, will also help the firm on a national level. The largest corporate filings of the past few years have been in New York and Delaware. But in the last three years, Bienenstock notes, Dewey has had a substantial amount of out-of-court restructuring work outside of New York and Delaware, advising clients like The Finish Line in Indianapolis, Chrysler Financial in Michigan, LNR Property in South Beach, and City Center in Las Vegas. (Bienenstock, who joined Dewey from Weil, Gotshal & Manges in November 2007, has handled big bankruptcy cases for the likes of Enron, General Motors, and auto parts maker Delphi.)
While corporate bankruptcies fell in 2010, Bennett doesn't believe that all of the lucrative restructuring assignments have run dry. He agrees most of the "megacases" have come and gone, but other segments of the turnaround market remain active.
Many of the distressed investors that Bennett represents no longer exclusively focus on U.S.-issued securities and are looking to foreign-based investments. While workouts generally require the same skills of restructuring lawyers, Bennett says that local business finance law expertise is often required in order to advise clients abroad. Dewey's 17 international offices provide the global platform that Bennett says his group is looking for in order to better service clients.
Many observers also believe that 2011 will be the year to focus on state deficits. "The municipal debt market is huge, and there are a number of issuers facing more financial stress than they've ever experienced before," Bennett says. "[T]hat's caused by a combination of higher debts and in many parts of the country lower and stagnant tax revenues, partly as a result of steps they've had to take with tax shortfalls and growing pension obligations."
Whether or not this will lead to more debt restructurings by municipalities is an open question. If it does, Bennett hopes his group will help to bring some of this work to Dewey.
Asked about the current debate raging in Congress and elsewhere about whether states should be allowed to file for bankruptcy, Bennett declined to comment. Bienenstock does have an opinion on the matter. "I really doubt that's going to happen," he says of the possibility of Congress passing a law authorizing states to file for Chapter 9. "When people sit down to wrestle with the constitutional and practical hurdles, I think you're not going to see state bankruptcies."
As for his move to Dewey, Bennett says he struggled with the decision to leave a firm that bore his name for 16 years. "It took a lot of thought and soul-searching," he says, "but at the end of the day we felt it was just the right thing to do."
The loss of Bennett's team leaves Hennigan Dorman with 35 lawyers. Most of the firm's bankruptcy work has since moved to New York and Delaware, meaning that Bennett's group was better served working with a firm with a substantial East Coast presence. Now, Hennigan says, his firm will close its New York office as a result of the moves, since the location was used primarily for conferences and as working space for the firm's bankruptcy lawyers.
The addition of Bennett and his team are the latest in a string of high-profile West Coast lateral hires for Dewey. The firm recruited former Cooley M&A chair Richard "Rick" Climan and several partners to the firm's office in East Palo Alto, Calif., last year. In January, Dewey added former Howrey vice-chairman Henry Bunsow and two other IP partners. Bunsow now heads the firm's IP litigation practice from the firm's San Francisco office.
Additional reporting by Amanda Bronstad in Los Angeles.
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