January 11, 2011 6:09 PM

Report: Corporate Bankruptcies Fell in 2010

Posted by Brian Baxter

According to numbers released this week by BankruptcyData.com, the number of Chapter 7 and Chapter 11 filings by public companies in 2010 fell by more than half compared to the number of filings in 2009. (Hat Tip: The Wall Street Journal and Law360.com.)

The 106 filings in 2010 also had a net asset value of $89 billion, a steep drop-off from the $594 billion in combined asset value for companies entering bankruptcy the year before. Financial firms and bank holding companies accounted for more than half of the top 20 companies to file for bankruptcy last year, according to a list compiled by BankruptcyData. (The complete breakdown is only available to BankruptcyData subscribers.)

According to our own prior reporting, Kirkland & Ellis and Skadden, Arps, Slate, Meagher & Flom each handled three of the 20 largest corporate filings last year, as determined by BankruptcyData. Skadden snared the outside counsel work for Anthracite Capital, AMCORE Financial, and Vertis, while Kirkland nabbed debtor's side assignments for Corus Bankshares, A&P, and Innkeepers USA.

Kirkland would have taken the lead had it held onto the bankruptcy work for Blockbuster. The troubled video rental company is now being advised by Weil, Gotshal & Manges, which accounts for just one of the top 20 filings of 2010. Of course, Weil has the gift that keeps on giving: the Lehman Brothers bankruptcy.

Los Angeles litigation and insolvency boutique Landau, Gottfried & Berger handled more cases among the top 20 than Weil and several other Am Law 100 heavy hitters. The 13-lawyer firm represented FirstFed Financial and Harrington West Financial Group in their Chapter 11 cases.

Other Am Law firms representing the top filers of 2010 include: Dewey & LeBoeuf (Ambac Financial), Patton Boggs (R&G Financial), Hinshaw & Culbertson (Midwest Banc Holdings), Akin Gump Strauss Hauer & Feld (TerreStar Networks), Cleary Gottlieb Steen & Hamilton (Truvo USA), Vinson & Elkins (Trico Marine Services), and Hughes Hubbard & Reed (Affiliated Media).

As two plus years of bankruptcy boom times begin to wind down, out-of-court restructurings present opportunities for idling bankruptcy practices. As part of a compendium assessing the state of various practice areas in 2011, Skadden considers what's in store for corporate restructuring this year.

In other restructuring and bankruptcy news...

Bloomberg reports that Michigan-based firms Miller, Canfield, Paddock and Stone and Clark Hill have been retained by Detroit's ailing public school district to advise on a General Motors-style restructuring in order to avoid bankruptcy. Wachtell, Lipton, Rosen & Katz has also provided pro bono restructuring services to the Mystic Aquarium, according to The Day newspaper in New London, Conn.

Outside of the U.S., Legal Week reports that Linklaters and Allen & Overy are working on a $4 billion restructuring of Portuguese highway construction company Brisa. And then there are still those companies skirting on the brink of bankruptcy.

The Wall Street Journal reported on Monday that Melville, N.Y.-based cafeteria-style Italian eatery Sbarro had hired Kirkland for restructuring counsel after the company defaulted on its debt.

Kirkland is advising Sbarro through partners James Sprayregen, Edward Sassower, and Nicole Greenblatt. The firm advised Sbarro's current private equity owners, New York-based MidOcean Partners, when it acquired the chain from its founding family for $450 million in 2007.

Companies filing for bankruptcy on Tuesday included Philadelphia-based Constar International, one of North America's largest makers of plastic soda bottles and food containers, Bloomberg reports. The company, which has already filed a prepackaged plan of reorganization, is being represented by Wilmer Cutler Pickering Hale and Dorr.

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