UnitedChicago
Veteran
- Aug 27, 2002
- 756
- 0
Bankruptcy Business Booms in Chicago
By BRANDON LOOMIS
.c The Associated Press
CHICAGO (AP) - The bankruptcy business is booming in Chicago, even as the city''s hometown airlines struggles to emerge from the biggest such filing in aviation history.
Partly due to increased attorneys fees and new rules reducing days in court, Chicago has been picking up major cases that formerly might have gone to Delaware or New York.
A raft of high-profile filings in 2002 - Kmart, United Airlines parent UAL Corp. and Conseco Inc. - showed that corporations, too, are getting comfortable with the way Chicago''s federal bankruptcy judges treat them.
Delaware long has been considered a prime spot to file, partly because many companies are incorporated there and because attorneys say judges there were easy to work with.
However, ``Delaware as a venue became unfavorable because of its backlog,'''' said David Newby, a Chicago attorney for property owners leasing to Kmart. ``Ironically, it became too popular.''''
Newby and others say Chicago is benefiting from word of mouth as attorneys report good experiences.
Attorney Harold Kaplan, chairman of the Chicago Bar Association''s bankruptcy committee, said the Chicago bankruptcy court formerly had a reputation for rejecting attorney fees that would be in the range of New York and other East Coast courts.
Rulings in recent filings have evened that out, he said. And bankruptcy judges here have proven swift and responsive, encouraging some of the city''s corporations and top bankruptcy law firms to stay at home with their filings.
Bankruptcy Judge Eugene Wedoff, the court''s chief judge, said he and other judges have worked to simplify and standardize court policies so that the court has become more efficient.
``The goal is to make the court more effective rather than to drum up business,'''' Wedoff said.
``We want to be as good a court as we can for everybody who uses the court. If you can see recent filings here as an indication that we''re doing our job, then good.''''
Chicago''s 363 Chapter 11 bankruptcy filings, primarily corporate cases, in the year that ended Sept. 30 left it a distant fourth behind New York, Delaware and Los Angeles. But the trend in major corporation filings here is new, and both UAL and Conseco filed in December.
Newby said one change here that corporations and attorneys like is toward granting what are called omnibus hearing dates. Hearing all related motions at once - often over two days each month - replaces an old practice of allowing anyone involved in a case to receive a hearing at any time, he said.
The old practice is ``not going to work in a Kmart case,'''' Newby said. ``It''s not going to work in the United case. It''s not going to work for Conseco, because you''d be in court all day every day.''''
Finally, Newby said, Chicago has an abundance of respected bankruptcy attorneys who used to take big cases elsewhere.
``This sounds like apple polishing, but it''s just true. There are some extraordinarily skilled bankruptcy lawyers in Chicago,'''' Newby said. ``It''s not that talented folks aren''t living in Philadelphia and New York, but we''ve got our share.
``Once it became acceptable to file in Chicago, it almost became imperative to file in Chicago.''''
By BRANDON LOOMIS
.c The Associated Press
CHICAGO (AP) - The bankruptcy business is booming in Chicago, even as the city''s hometown airlines struggles to emerge from the biggest such filing in aviation history.
Partly due to increased attorneys fees and new rules reducing days in court, Chicago has been picking up major cases that formerly might have gone to Delaware or New York.
A raft of high-profile filings in 2002 - Kmart, United Airlines parent UAL Corp. and Conseco Inc. - showed that corporations, too, are getting comfortable with the way Chicago''s federal bankruptcy judges treat them.
Delaware long has been considered a prime spot to file, partly because many companies are incorporated there and because attorneys say judges there were easy to work with.
However, ``Delaware as a venue became unfavorable because of its backlog,'''' said David Newby, a Chicago attorney for property owners leasing to Kmart. ``Ironically, it became too popular.''''
Newby and others say Chicago is benefiting from word of mouth as attorneys report good experiences.
Attorney Harold Kaplan, chairman of the Chicago Bar Association''s bankruptcy committee, said the Chicago bankruptcy court formerly had a reputation for rejecting attorney fees that would be in the range of New York and other East Coast courts.
Rulings in recent filings have evened that out, he said. And bankruptcy judges here have proven swift and responsive, encouraging some of the city''s corporations and top bankruptcy law firms to stay at home with their filings.
Bankruptcy Judge Eugene Wedoff, the court''s chief judge, said he and other judges have worked to simplify and standardize court policies so that the court has become more efficient.
``The goal is to make the court more effective rather than to drum up business,'''' Wedoff said.
``We want to be as good a court as we can for everybody who uses the court. If you can see recent filings here as an indication that we''re doing our job, then good.''''
Chicago''s 363 Chapter 11 bankruptcy filings, primarily corporate cases, in the year that ended Sept. 30 left it a distant fourth behind New York, Delaware and Los Angeles. But the trend in major corporation filings here is new, and both UAL and Conseco filed in December.
Newby said one change here that corporations and attorneys like is toward granting what are called omnibus hearing dates. Hearing all related motions at once - often over two days each month - replaces an old practice of allowing anyone involved in a case to receive a hearing at any time, he said.
The old practice is ``not going to work in a Kmart case,'''' Newby said. ``It''s not going to work in the United case. It''s not going to work for Conseco, because you''d be in court all day every day.''''
Finally, Newby said, Chicago has an abundance of respected bankruptcy attorneys who used to take big cases elsewhere.
``This sounds like apple polishing, but it''s just true. There are some extraordinarily skilled bankruptcy lawyers in Chicago,'''' Newby said. ``It''s not that talented folks aren''t living in Philadelphia and New York, but we''ve got our share.
``Once it became acceptable to file in Chicago, it almost became imperative to file in Chicago.''''