Dallas bankruptcy partner Aaron Kaufman, who recently led Gold’s Gym through its Chapter 11 reorganization, has lateraled from Dykema to Gray Reed, the firm announced on Wednesday.
Gray Reed has more than doubled its bankruptcy bench – from four full-time attorneys to 10 – this year as Texas has seen a wave of Chapter 11 filings. Kaufman pointed to that growth as a big reason he joined the firm.
“As I saw the bankruptcy practice expanding in Texas, between Houston and Dallas especially, it became increasingly clear I needed to find a place that was more committed to the practice,” he said. “Gray Reed has hired and retained quality people.”
After receiving his law degree from the University of Houston and clerking for retired U.S. Bankruptcy Judge Leif Clark of the Western District of Texas, Kaufman started his career at Cox Smith in 2008. He said it was hard to say goodbye to his “outstanding” mentors Deborah Williamson, Mark Andrews and George Tarpley, but Gray Reed partners Cary Gray and Jason Brookner were convincing.
Kaufman represents debtors, trustees, lenders to committees, investors and other parties with a stake in the bankruptcy process. He has advised companies in the energy, healthcare, retail, construction, real estate, technology and fitness industries.
In addition to the Gold’s Gym restructuring, Kaufman has negotiated $75 million in distressed asset sales on behalf of Texas midstream energy company Connect Transport, and has handled the reorganization of retail uniform and apparel distribution company IQ Apparel and the contested sale of Camp Arrowhead, a legacy Central Texas girl’s summer camp. He says he has confirmed about a half dozen reorganization plans over the past year.
Kaufman was brought into the Gold’s Gym matter through a referral from a friend who was representing TRT Holdings, which owns Gold’s. The Chapter 11 restructuring – which was filed on May 4 in Dallas federal court and included an expedited auction and sale that closed on August 24 – has resulted in a projected 100% payout for creditors and anticipated dividend for equity.
The successful reorganization is a credit to very good planning, very good clients and very good professionals, says Kaufman.
“We went in with one public plan but had many contingencies,” he said. “The brand was so strong, especially outside the U.S., that we knew people were going to want to buy it. Throughout the entirety of the case we didn’t have a single contested hearing.”
Though Kaufman has a national practice, most of his cases have been in the Dallas and Fort Worth bankruptcy courts. While he credits Judges David Jones and Marvin Isgur for making the Southern District of Texas a go-to destination for Chapter 11 filings, he expects a leveling of the playing field with the Northern District in the next few years.
“It’s about predictability,” he said. “You can get the same results here [in the Northern District of Texas], it is just a matter of perception.”
As the COVID-19 pandemic continues to hit consumer and retail facing businesses hard, Kaufman is paying close attention to the ripple effect of what happens to the companies that service those businesses and are also impacted by changing consumer demand.
“What follows an economic shift like this is the bursting of a real estate bubble once the operating companies work through their restructurings,” he said.