The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Ronit J. Berkovich, Partner—Business Finance & Restructuring
Ronit J. Berkovich is a partner in Weil, Gotshal & Manges LLP’s Business Finance & Restructuring department and is based in New York. Ms. Berkovich represents debtors, creditors, lenders, investors, and acquirers of assets in all aspects of distressed situations. She has served as debtors’ counsel in several of the largest and most significant Chapter 11 cases in history, including General Motors, Lehman Brothers, WorldCom/MCI, and Takata. Ms. Berkovich actively lectures on various topics relating to restructuring. She is the co-editor of the Weil Bankruptcy Blog and has written extensively, including articles published in The Banking Law Journal, The American University Law Review, Real Estate Finance, and the Harvard Law School Bankruptcy Roundtable. In 2019, Ms. Berkovich was awarded “Dealmaker of the Year” by The American Lawyer and named “Outstanding Restructuring Lawyer” by Turnarounds & Workouts. In 2018, she was named an “MVP for Bankruptcy” by Law360. Most recently, she has become a member of the National Bankruptcy Conference, an organization of prominent academics and practitioners that provides input to Congress on bankruptcy-related topics, and joined Bloomberg Law’s Bankruptcy Innovation Board. Ms. Berkovich is also a member of the Lawyers Executive Committee and Bankruptcy and Reorgan-ization Group of the UJA Federation of New York and co-chaired its Next Generation Bankruptcy and Reorganization Group for several years.
Describe your practice area and what it entails.
My practice focuses on restructuring, which is a broad prac-
tice that involves anything relating to a company in financial distress. When representing the company itself, the goal is usually to help the company out of its difficult situation, whether through negotiations with creditors and shareholders, other methods of increasing liquidity (such as selling assets), or a formal bankruptcy process. A successful restructuring usually benefits many parties—not only do we keep the company afloat and save jobs, but also, by maximizing value, we provide the greatest recovery to creditors throughout the capital structure (from banks to bondholders to trade creditors to litigation claimants).
What types of clients do you represent?
The bread and butter of my practice is to represent companies in financial distress (called “the debtor”). I have represented very prominent companies, like General Motors, Lehman Brothers, and WorldCom, as well as companies that are not household names, but are nonetheless important in their industries.
I sometimes represent creditors. Examples include financial institutions like Brookfield, (the largest creditor in the multibillion-dollar bankruptcy of Texas utility company Energy Future Holdings [TXU]) and Johnson & Johnson (a creditor in the bankruptcy of its talc supplier).
I have also represented purchasers of assets of distressed companies, such as Valeant purchasing the assets of Dendreon (a pharmaceutical company focused on immunotherapy treatments for cancer) and a Chinese company purchasing the assets of an airline parts manufacturer.
What types of cases/deals do you work on?
Financial distress can be caused by many different factors, which makes every situation different. Many cases are simply examples of companies having too much debt and needing a classic balance sheet restructuring (for example a debt-for-equity swap, which can be accomplished out of court or through a bankruptcy, depending on the facts). Other times, fraud is involved (such as in my WorldCom and Parmalat cases), while in other cases, a wave of mass tort and other litigation liabilities cause the company to spiral into distress (such as Takata and Insys, the latter being the first opioid manufacturer to file for bankruptcy due to the litigation over opioid liabilities).
Each case is different, depending on the facts and the parties involved. Some are out-of-court workouts, others are prepackaged bankruptcy filings, and others are more contentious traditional bankruptcy cases. Some involve asset sales, and an increasing number of cases have involved international or cross-border work.
How did you choose this practice area?
I always thought I would be a corporate lawyer and accepted a job in the corporate department of a large Boston-based law firm after my 2L summer. My second day of work at the firm was 9/11. The economy entered into a recession, and corporate work was very slow. I was extremely bored and dissatisfied. Thankfully, in my 3L year, I took a bankruptcy class that I greatly enjoyed and did well in with the famed Professor Elizabeth Warren, so with Professor Warren’s encouragement (and assistance), I decided to try bankruptcy/restructuring work because it was a busy practice during that time. I joined Weil’s restructuring group in June of 2002, and I have been a restructuring lawyer ever since. I love this practice, especially at Weil, and I cannot imagine that I would have loved corporate law or another firm as much.
What is a typical day like and/or what are some common tasks you perform?
There is no typical day. Because restructuring is such a hybrid practice, I could do any or all of the following on a single day:
- Negotiating a debtor-in-possession loan or a restructuring support agreement.
- Arguing in court.
- Advising a board of directors.
- Participating in team meetings where we discuss creative strategies for solving our client’s problems.
- Reviewing a memorandum by an associate analyzing a particular legal issue and discussing the issue with the associate.
- Analyzing loan documents or indentures.
- Meeting with the company, its financial advisors, and its investment bankers to discuss strategy and options.
- Editing a motion or brief.
- Reading pleadings that have been filed by other parties in my cases.
- Negotiating and marking up an asset purchase agreement.
- Analyzing a proposed restructuring plan.
- Sometimes I wake up knowing exactly what my day will entail, and other times, I show up and have to do some quick calendar-shifting to accommodate this fast-paced practice.
What training, classes, experience, or skills development would you recommend to someone who wishes to enter your practice area?
There is no class that is an absolute prerequisite for bankruptcy—not even a bankruptcy class. You will learn what you need to know on the job. Nevertheless, I think the following are the most helpful classes: bankruptcy/reorganization, secured transactions, corporate finance, and any class that teaches you to analyze/negotiate contracts.
What is the most challenging aspect of practicing in this area?
What is most challenging about restructuring is also one of the things that makes it so exciting—almost everything is urgent and important. The former head of Weil’s Restructuring group (the late Harvey Miller, who is also viewed by many as the founder of modern bankruptcy law) used to analogize a company in financial distress to a patient on the operating table, and we are the surgeons who must act quickly and with great skill to save the patient. The restructuring is often literally the most important event the company has ever gone through—and its very future is on the line. So much is urgent because delay could cause massive losses. Therefore, we work on a lot of tight deadlines. However, like many type-A personalities, I do my best work and enjoy it the most when the stakes are high and the pressure is on. These circumstances lead to amazing teamwork and camaraderie, and we can look back at what we have done with a real sense of accomplishment.
What do you like best about your practice area?
What I like best about this practice is that not a day goes by that I don’t learn something new. The law in bankruptcy is always changing (each day approximately 3 to 10 new opinions are issued by bankruptcy courts and higher courts throughout the country), and there are so many different issues that can come up in any one case. No one has seen it all, and there are times when the first-year associate knows more about a particular legal issue than the partner who has been practicing for 40-plus years. It is also extremely creative—there is no one-size-fits-all solution, and creative ways of using the law or making arguments can be game changers. There is even the opportunity to change the practice by trying out something new and watching it become a mainstream tool.
What is unique about your practice area at your firm?
Restructuring is the rare practice in a large law firm that is truly a hybrid between corporate and litigation. We are analyzing complex capital structures and negotiating all types of corporate agreements (asset purchase agreements, loan agreements, etc.) with our corporate colleagues, but we are also drafting briefs and appearing in court to make arguments. That variety makes the practice so interesting.
It also has me working closely with attorneys throughout the firm—spanning our litigation, M&A, banking, capital markets, and tax practices, to name a few, and wide-ranging specialty areas, including environmental, real estate, and securities, among others. We have to sit together, roll up our sleeves, and come up with a comprehensive solution to our client’s problems, and one that the creditors and/or the court will buy into.
What are some typical tasks that a junior lawyer would perform in this practice area?
Junior associates get a variety of work—including drafting motions (which involves close contact with the company and its financial advisors to gather information); analyzing and summarizing pleadings; preparing board presentations; keeping track of all the tasks that need to get done; researching and writing memos; drafting hearing scripts; appearing in court (usually on smaller or uncontested matters); and participating in negotiation sessions with creditors, litigants, and asset purchasers.
Because restructuring (unlike litigation or corporate deals) is something most clients have never been through before, junior associates get more of an opportunity to provide advice to clients, explaining bankruptcy law or process.
The learning curve is steep, and most junior associates don’t even realize how much they know until the summer associates show up, and the juniors get to teach the summers about our practice or supervise them on an assignment.