The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Aparna Yenamandra, Partner, and Stephen L. Iacovo, Associate—Restructuring
Aparna Yenamandra is a restructuring partner in the New York office of Kirkland & Ellis LLP (after having been a summer associate and associate at Kirkland). She advises companies and creditors with investments in distressed companies across a host of industries, including oil and gas, retail, and software. From a company perspective, she advises companies in connection with Chapter 11 filings and out-of-court deleveraging solutions. She also advises creditors in connection with distressed investments and sale transactions. Aparna received her B.A. in Economics and Political Science from New York University and her J.D. from Villanova University Charles Widger School of Law.
Stephen L. Iacovo is an associate in the restructuring group at Kirkland & Ellis in Chicago. Since joining Kirkland in 2016, Stephen has been involved in some of the largest and most complex corporate restructurings of the past few years, including representing iHeartMedia, Inc. and Avaya Inc. in their Chapter 11 cases. Stephen also maintains an active pro bono practice serving military veterans. Stephen graduated with a J.D. from the University of Pennsylvania Law School and an M.B.A. from the Wharton School at the University of Pennsylvania in 2016. Prior to law and business school, Stephen served as a Commissioned Officer in the U.S. Army for four years. Stephen earned his Commission through Army ROTC at the University of Notre Dame, where he graduated with a B.B.A. in Finance and a supplemental major in History in 2009.
Describe your practice area and what it entails.
Stephen: Restructuring lawyers advise companies, private equity sponsors, distressed debt funds, ad hoc committees, and other investors with respect to public, private, and portfolio companies in financial distress, including out-of-court exchanges and restructurings, amend and extend transactions, refinancings, liability management transactions, and bankruptcy and insolvency proceedings.
What types of clients do you represent?
Aparna: In the U.S., our practice is approximately 75-80 percent company side and 20-25 percent creditor/investor side. In London, Munich, and Hong Kong, it is the reverse, although our offices in the U.S. and internationally are fully integrated. We represent the largest and most complex clients and are industry agnostic. For example, in recent years, oil and gas has been the focus of the restructuring community, then retail, and now telecom and health care. Among other large clients, we have represented Caesars, Energy Future Holdings, iHeart, and Toys ‘R Us. Our representations of Sea-drill and Noble, in particular, reflected the cross-integration of our domestic and international offices.
Stephen: Kirkland advises companies, private equity sponsors, distressed debt funds, ad hoc committees, and other investors in all aspects of corporate restructuring, bankruptcy, and insolvency proceedings. Some of my notable clients have included iHeartMedia, Inc. in its currently pending Chapter 11 cases and Avaya Inc. in its 2017 Chapter 11 cases. I also represented an international maritime logistics services company in an out-of-court restructuring, and I’m currently representing an operating company interested in potentially purchasing assets of an insolvent Fortune 500 company.
What types of cases/deals do you work on?
Aparna: As a group, we largely prepare companies for an expeditious stay in Chapter 11. We work hard to negotiate consensus with as many creditor constituencies as possible, but we are prepared to litigate where necessary. In addition, we advise companies on out-of-court deleveraging transactions (e.g., a debt-for-equity swap, an amendment and extension of debt facilities, and/or sale transactions). I have spent the vast majority of my time at Kirkland on Energy Future Holdings, the third-largest operational filing in history. I have also had an opportunity to work on smaller cases in the software and retail space.
Stephen: The majority of my deals involve representing debtors in complex Chapter 11 proceedings. For example, in connection with iHeartMedia, Inc.’s Chapter 11 restructuring, the company reached an agreement with holders of more than $11 billion of its debt and its financial sponsors regarding a comprehensive balance sheet restructuring that will reduce iHeart’s debt by more than $10 billion, provide iHeart’s existing senior creditors with over 90 percent of the reorganized company’s stock, and separate iHeart from its majority-owned subsidiary, Clear Channel Outdoor Holdings, Inc.
How did you choose this practice area?
Aparna: I liked (and still like!) that restructuring has a mix of litigation elements and corporate elements and that we are in a position to help companies during what is typically a high-stress time for them. Helping to reorganize a company, stabilize its operations, save jobs, and “keep the lights on” is hugely satisfying. I also like that the practice affords an opportunity to both sit at the negotiating table and also present arguments in court, providing a very comprehensive experience to any young lawyer.
Stephen: I chose restructuring because I was looking for a dynamic practice that also required a level of business skills and sophistication above and beyond that of traditional corporate lawyers. In particular, representing debtors requires lawyers to negotiate and broker extremely complex deals with large numbers of key stakeholders, which can involve the use or threat of litigation when needed. I particularly enjoy that every single day and every single case presents new challenges and the ability to use both transactional and litigation skills. In addition, bankruptcy lawyers get to appear in court frequently, even at junior levels of responsibility. And on top of the legal work, I spend considerable time working with restructuring advisers and investment bankers to assist and advise clients on strategic and operational business issues. In my experience, no other practice uses such a broad range of skills.
What is a typical day like and/or what are some common tasks you perform?
Aparna: A typical day changes dramatically the longer you are here. I have been at Kirkland in the restructuring group for six-and-a-half years. A typical day for me at this stage is a mix of fielding inbound questions from senior members of the management team and board members as to either issues that have arisen or broader restructuring strategy questions; working with younger associates to develop pleadings, deal documents, and various client presentations; and coordinating with my senior partners to make sure the communication lines are constantly open and that we are working together as cohesively as possible.
Stephen: The best part about being a restructuring lawyer is that there is no typical day. Some days, I’ll be at a client’s offices, working with the client and its other advisers to formulate a restructuring strategy and prepare the company for a Chapter 11 filing. The next week, I might be in court seeking confirmation of a Chapter 11 plan. The days in between are spent on conference calls and in meetings trying to broker agreements to piece together a global deal and drafting various court-related documents, such as first day motions, plans of reorganization, claim objections, sale motions, and orders. I’ve even drafted bankruptcy appellate briefs. On any given week, I can find myself at a client’s headquarters anywhere in the world, at a meeting with key lender groups in New York, or in court anywhere in the U.S.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
Aparna: I would recommend taking a broad base of classes, including those touching on business organizations, evidence, federal tax, accounting, trial advocacy, and legal writing. A secured transactions class may also be helpful to understand bankruptcy basics. Much of what we do involves working with investment bankers, so any business-related classes would be helpful. In addition, if there is an opportunity to clerk with a bankruptcy judge, that could be helpful to understanding restructuring from the bench’s perspective. All that being said, Kirkland offers a wealth of training sessions on key topics, and nothing beats on-the-job training.
What is the most challenging aspect of practicing in this area?
Aparna: One challenging aspect of the practice as debtors’ counsel, in particular, is that we are the consensus-makers among a number of parties with investments at stake. Debtors owe a fiduciary duty to maximize value for all of their stakeholders, and debtors’ counsel often has the task of trying to negotiate a global compromise across a number of disparate creditor constituencies who often have extremely different goals. Bringing those parties together can sometimes be a challenge but when done successfully, can also be very rewarding. Another challenge is the unpredictability of the practice—some days are simply triage for unexpected yet significant issues.
What do you like best about your practice area?
Aparna: There are a number of things I particularly like about my practice area. First, we work with virtually every practice group in the firm (tax, litigation, debt finance, capital markets, M&A, etc.), which allows me to develop relationships and get a snapshot of the work that others do. Second, every day is completely unpredictable and different from the previous day, which keeps things dynamic and interesting. Third, as distressed industries change (e.g., the shift in focus from oil and gas to retail to health care and telecom), we get to become subject-matter experts in various industries. That means we are always learning about new industries and new companies (often high-profile ones), which I really enjoy.
Stephen: The thing I like most about my practice area is the people. The restructuring industry is a very small community, and you consistently work with (or against) the same people over and over and are consistently in front of the same judges. Because of that dynamic, relationships and credibility are so important, and that builds a real camaraderie across the industry that you can’t find anywhere else.
What is unique about this practice area at your firm?
Aparna: Kirkland’s restructuring practice is unique. It is a young, highly energized group that is growing quickly but retains a small-group feel. The group leaders are laser focused on ensuring that young lawyers have opportunities as early as possible, maximizing the group’s diversity and encouraging a healthy work/life balance. Our cases are generally staffed fairly leanly, which means that there are not a number of layers between the senior partners and junior associates. This not only gives junior associates opportunities to take on more substantive work, but it also helps bridge relationships among the deal teams. We are also office agnostic—all of our cases are cross staffed between our primary New York and Chicago teams, which gives every team a chance to get to work with as broad a group as possible.
Stephen: Kirkland encourages junior associates, particularly in the restructuring group, to take on a lot of responsibility early. That includes getting up and arguing in court within your first couple of years of practice. Additionally, the Kirkland Institute of Restructuring Training is a one-of-a-kind training opportunity where associates get paired with teams of junior investment bankers from the top restructuring advisory banks in the world to compete in a mock restructuring scenario. The training allows attorneys to present a mock board scenario, with real directors and other senior restructuring professionals serving as the board of a distressed company, and provides tremendous networking opportunities with other restructuring professionals.
What are some typical career paths for lawyers in this practice area?
Stephen: Restructuring attorneys typically find themselves pursuing any of the following career paths, in no particular order: staying in private practice law; leaving the practice of law for a position as a non-legal adviser in either an investment bank’s restructuring group or at a restructuring advisory firm, with maybe an eventual career at a distressed hedge fund; or pursuing in-house opportunities. Restructuring lawyers actually make great “generalists” because we deal with so many business law issues in our day-to-day practice, including real estate, employment and labor, vendor contracts, corporate and securities law, litigation, etc.