© 2014 The Texas Lawbook.
By Brooks Igo
Staff Writer for The Texas Lawbook
(February 4) — Patton Boggs recently strengthened its bankruptcy practice by adding Daniel Stewart to its Dallas office as of counsel. He joins the Washington, D.C.-based firm from Vinson & Elkins, where he was a longtime partner and founded its restructuring and reorganization practice in 1999.
Stewart, who is the latest of the firm’s recent Dallas additions (Gina Betts, Ken Betts and Laurie Lang), said a shared enthusiasm for growth and opportunity in the Dallas market attracted him to his new firm.
“These are exciting times in the historically cyclical business of insolvency practice peaks and valleys,” said Stewart.
The Duke University School of Law graduate added that he hopes the firm’s bankruptcy group will enjoy a reputation as a market leader as its finance, private equity and litigation practices already do.
“Dan is one of the most well respected and experienced bankruptcy attorneys in our region,” Michael Forshey, managing partner of Patton Boggs’s Dallas office, said in a statement. “We are energized to start the New Year by adding a lawyer of his caliber to our team.”
The Texas Rangers Baseball, Energy Partners, Ltd. and Lack’s Furniture Chapter 11 cases are three of the most interesting and rewarding he said he has handled in his career.
In the Texas Rangers Chapter 11, he served as counsel for the senior lenders who were owed several hundred million dollars. He said his team achieved a public auction sale process for the Rangers, which resulted in a significant enhancement in both the sale price and the recovery to his client group.
“What made the case particularly interesting and rewarding was the extremely high quality of the lawyers and business people involved in the case on all sides, the cutting edge decisions of the judge and the speed of the case with all of the attendant deadlines and activity concluding in an all-night auction sale in the federal courthouse,” he said. “All the while, the Rangers were in the midst of a pennant race which culminated in their first World Series appearance.”
Stewart said filing Chapter 11 in the Energy Partners, Ltd. case gave his team and the company the time to negotiate a comprehensive restructure of its balance sheet, provide for ultimate payment in full to senior creditors, payment in full to all other creditors, the retention of equity for all old shareholders and the issuance of new and additional shares. The Houston and New Orleans-based oil and gas company’s shares are now trading on the NYSE at around $30 per share.
The Lack’s Furniture case was another textbook example of the use of Chapter 11, Stewart said. The family owned, $200 million retailer that has more than 31 stores throughout Texas faced serious troubles when its lender decided to call its loans and foreclose.
“This would have resulted in disaster to all other creditors, employees and shareholders,” he said. “Filing Chapter 11 and holding the bank at bay, while protecting it, allowed us to conduct an orderly process for the wind-down and sale of the business and its stores, resulting in payment in full of the bank, payment in full plus interest to all other creditors and an eight-figure return to the owner of the company.
“It was extremely rewarding.”
Patton Boggs’ most recent Dallas addition says he expects the fallout from the “exuberance” of today’s easy credit environment will keep many restructuring professionals busy for the next year or so with sales of businesses based upon lofty multiples, covenant-light credit agreements and rationalization and defense of refinancing dividends.
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