No Bankruptcy For Bankruptcy Lawyers
Many law firms are now considering how to retool in response to the downturn of 2008. However, at least one practice area is booming in these bust times: bankruptcy law. Today's Washington Post reports that in the first two months of 2008, 18 U.S. companies sought bankruptcy protection.
A rise in bankruptcies means more work for law firms -- both those that represent financially distressed companies as well as those representing creditors. Evelyn Biery of Fulbright and Jaworski told the Post that she plans to double the number of lawyers to handle bankruptcy-related work. And it's not just large firms reaping the benefits. Law professor Jack Williams of Georgia State University noted that smaller businesses, which are traditionally represented by small firms or solos, are also in distress because of tightening credit markets and declining retail sales.
Retail bankruptcies, such as that of Sharper Image, are creating a whole new class of creditors: gift card holders no longer able to redeem their card. As Lisa Fairfax discusses at the Conglomerate, one study predicts that shoppers could lose some $75 million this year as a result of gift cards that are not honored because of store closings. Though card holders legally have the right to assert a creditor's claim in bankruptcy, as this post notes, filing a claim is likely a worthless endeavor.
Posted by Carolyn Elefant on March 5, 2008 at 01:54 PM | Permalink
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