šNotice of Appearance: Jeffrey Cohen, Partner and Chair of Bankruptcy and Restructuring at Lowenstein Sandler LLPš
Today we welcome Jeffrey Cohen, Partner & Chair of the Bankruptcy and Restructuring group at Lowenstein Sandler LLP.
PETITION: Welcome Jeffrey. Letās kickoff with UCC representations generally. Youāve done a lot of retail work. Thereāve obviously been a lot of cases ā particularly those involving private equity sponsors ā where the UCC had to step up and do combat with the debtors, the debtorsā private equity sponsors, and the debtorsā āindependentā directors. What do you make of this dynamic? What of the cottage industry thatās formed around āfiduciary servicesā?
COHEN: Iāve always relished being the underdog. Iāve never minded battling from behind or overcoming obstacles. I view this dynamic the same way. Most cases start with the deck substantially stacked against unsecured creditors, generally, and the UCC, specifically. The debtors, private equity sponsors, lenders and debtorsā āindependent directorsā spend months devising a strategy to box in the UCC and unsecured creditors and we get weeks and sometimes days to fight back. I think itās unfortunate to treat your vendors, landlords and trade partners that way, but it is what it is. I am intimidated by nobody and will back down from no situation. Iām about getting dollars in creditorsā pockets. Along with my team, weāll roll up our sleeves and surgically dismantle most well devised plans when given the chance.
As far as the ācottage industryā you have referenced ā¦ over the last year weāve all adopted new terminology in our daily vernacular including, most notably, āWFHā for āwork from home.ā We should just call these guys āDFHā for ādirector for hireā. Honestly, there are so many wildly talented and bright individuals that have become the usual suspects in these independent fiduciary roles that itās really a shame the nature of the business (i.e. keeping the parties who hired them happy) prevents them from doing their job to the best of their ability sometimes. Thankfully most judges see right through the charade and let the committees do their job anyway, despite protests by the debtors that their āindependent directorā has already performed their investigation and found no basis for a claim.
PETITION: Letās talk about the recent mini-trend of hyper-expedited prepackaged bankruptcy cases. Belk Inc. and several other cases come to mind. Surely the aversion to longer more expensive cases is a ācredit negativeā for practices like Lowenstein Sandler LLP that represent official committees of unsecured creditors. Do you see these types of cases becoming more and more common and, if not, why not? What do you make of the manufactured venue thatās been leveraged to help make these cases happen?
COHEN: A lot of work goes into these expedited prepackaged cases in advance of their filing, so the professionals involved arenāt really hurting for work. Does it shorten and sometimes eliminate opportunities for a committee to be appointed and, in turn, for Lowenstein or one of our talented competitors to represent the Committee? Absolutely. But our goal remains focused on putting dollars in creditorsā pockets. In Belk, we represented approximately a dozen separate vendors, all of whom will get paid 100 cents in the ordinary course of business. In the long run, our clientsā happiness is good for business. So while I would have loved to represent the committee in Belk had there been one, the outcome for unsecured creditors was worth the tradeoff.
With respect to venue, the first large and notable chapter 11 case in my career was Enron, so venue selection or manipulation is nothing new to me or our industry. Remote appearances at hearings is certainly making venue selection even easier as armies of attorneys, financial advisors and bankers do not need to board planes and stay in hotels to appear around the country right now. I think this will lessen as cases start pivoting back to in-person hearings. Hopefully someday soon, weāll all be on the Acela to Wilmington again, avoiding the bathrooms at the train station and eating granola bars for dinner.
PETITION: You represented the committee in the Blockbuster Video case. Tell us a crazy story about that company and/or that case that isnāt commonly known.
COHEN: Fun question. There are actually a few stories that put a smile on my face, but the one that sticks out the most is when, during a large meeting between the Committee and the company, I asked the companyās new CEO if I could see his Blockbuster card (I showed him mine) and he admitted to not being an active member but rather being a Netflix subscriber. At the time, Netflix was still delivering DVDs by mail and wasnāt the behemoth digital content provider they are today. Seriously dude?!?!
PETITION: What surprised you the most about the short-lived cycle that transpired over the course of 2020?
COHEN: The speed and growth of the technology we used to run our cases and represent our clients. For example, my first cross examination of a witness during COVID involved having to dial-in by phone, login to a designated court platform and then separately have my litigation partner and witness connect by Skype. Just months later, court hearings were run much smoother and generally on one video platform, auctions were run with numerous bidders and hundreds of attendees without too many hiccups and driving value in virtually the same manner as in-person auctions.
Also, how quickly all case parties came together to work collaboratively to try to figure out a solution. When all stores were closed, it made it impossible to run store closing sales if you couldnāt physically access the locations. But this wasnāt a debtor-specific problem. This was a problem for all parties involved and, to the credit of our industry, we saw a lot of collaboration to get parties to the best result possible.
PETITION: Where do you think thereāll be activity in 2021? Is there something hiding under some rock somewhere that people should be paying more attention to?
COHEN: I donāt look under rocks, although I am a big fan of Dwayne Johnson.
I think there are some obvious possibilities including lodging, entertainment, travel and fitness, but it really depends on the level of stimulus funds these industries receive and whether they successfully bridge them to the other side of Covid or not. Unfortunately, your guess is as good as mine here.
PETITION: What is the best piece of professional advice that youāve ever gotten and why?
COHEN: I was lucky to have several mentors, both personal and professional. One common piece of advice I received was that itās about the long game and not the quick fix. As a result, I have continued to hold myself and my team to a high moral and ethical standard that I wonāt compromise to get hired as counsel in a single case or resolve an isolated case-specific issue. I want clients to hire me, and the Lowenstein bankruptcy group for years to come, because weāre loyal, smart and qualified. We never want to be the flavor of the month.
PETITION: What are some books or podcasts that have helped you get to where you are today?
COHEN: āThe Long Run,ā by Matt Long. Itās the only book Iāve ever read multiple times ā¦ by choice! If youāre not inspired by a New York City firefighter who had less than a 20% chance of survival after getting hit by a charter bus during a MTA strike, not only surviving, but relearning to walk, then run, then train for and attempt to run the NYC marathon and a full Ironman triathlon, you arenāt capable of being inspired. His grit and determination is something that gets me through case challenges, long hours, party disputes and dirty litigation tactics by adversaries. Keep pushing. Donāt stop.
PETITION: The fact that youāre analogizing restructuring practice with a firefighter who got hit by a charter bus, had to fight to walk again, did so, then ran 26.2 miles on one of the harder core marathon courses and the for sh*ts and giggles, did a full Ironman ā¦. is ā¦ probably not that confidence-inspiring for MBA and/or law students considering a career in restructuring. Juuuuuust sayin, homie. š
Anyway, thanks, Jeff, for participating. Cheers!