Search Courses
About
Home

Business Law: Finance: Banking & Bankruptcy

Your Map

Academia
Business Law
Finance: Banking & Bankruptcy

Lawyers whose practice focuses on financial institutions and lender-creditor transactions may specialize in banking or bankruptcy, or both. They may handle a variety of loan transactions, such as secured and unsecured lending, as well as situations that require the restructuring of debt.

Lawyers working in the banking practice area generally represent both lenders and borrowers in their financing transactions. They structure, negotiate and draft credit arrangements of all types: commercial paper and medium-term note programs, leasing transactions, asset-based financings and other funding and trade finance facilities. They may serve a variety of business clients: commercial finance lenders, equipment leasing companies, financial services providers, credit card companies, institutional investors and insurance companies. They also provide advice to lenders and financial institutions on many types of state and federal regulations, including those from the Federal Reserve Banks, the Office of the [...]

Open to see details

Lawyers whose practice focuses on financial institutions and lender-creditor transactions may specialize in banking or bankruptcy, or both. They may handle a variety of loan transactions, such as secured and unsecured lending, as well as situations that require the restructuring of debt.

Lawyers working in the banking practice area generally represent both lenders and borrowers in their financing transactions. They structure, negotiate and draft credit arrangements of all types: commercial paper and medium-term note programs, leasing transactions, asset-based financings and other funding and trade finance facilities. They may serve a variety of business clients: commercial finance lenders, equipment leasing companies, financial services providers, credit card companies, institutional investors and insurance companies. They also provide advice to lenders and financial institutions on many types of state and federal regulations, including those from the Federal Reserve Banks, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision and the Treasury Department.

A banking practice is often integrated with a capital markets practice, given the commercial activities of many investment banks and the development of loan securitizations, collateralized bond offerings, and even the securitization of credit card receivables. Lawyers with a banking expertise may also handle development and financing agreements for lenders, purchasers and underwriters in a variety of projects called “project finance” work. Infrastructure projects requiring complex funding arrangements include power, water, transportation, communication or alternative energy projects, both in the U.S. and abroad.

Attorneys who specialize in bankruptcy law may choose to work in a number of different practices. Most “consumer” bankruptcy cases, by definition, are filed by individuals and few of these cases involve any meaningful assets. Bankruptcy lawyers with a “consumer” practice help individual clients facing foreclosure, liens, repossession and wage garnishments in finding a suitable option to eliminate their debts. Most law firms with a bankruptcy practice advise business clients, and nearly all of the assets administered by the bankruptcy system involve business filings. Business bankruptcy lawyers, like those advising individuals, help their clients find ways to reduce or eliminate their debt. They may suggest different methods to do this, such as liquidating the assets of the business and distributing them among creditors; developing a court-approved reorganization plan; or negotiating another resolution involving the repayment of creditors over time. Other business bankruptcy lawyers represent the creditors who are seeking payment. They may also work as advisors to businesses that seek to purchase failing businesses for investment purposes, or for other businesses that deal in liquidation or financial restructuring. Lawyers who work on debt restructuring may need expertise in securities law, bankruptcy, real estate and tax law to effectively represent their clients in a restructuring transaction or insolvency proceeding.

One of the interesting things about a bankruptcy practice is that it’s a hybrid between litigation and transactional practice. Bankruptcy lawyers often draft negotiated agreements as well as pleadings, briefs and motions, so it helps to have good contract and corporate drafting skills. In fact, bankruptcy lawyers must be proficient at virtually all of the skills traditionally practiced by a well-rounded lawyer. The uninitiated might think that bankruptcy lawyers are specialists. It is true that bankruptcy lawyers develop detailed knowledge of the Bankruptcy Code and associated procedure. However, any type and size of business can encounter bankruptcy problems, and any area of substantive law can arise in a bankruptcy setting. So bankruptcy lawyers should be versatile enough to deal with issues arising out of contracts, torts, intellectual property, labor, securities, environmental, real property and tax, to name just a few. They should also be capable of analyzing financial information and providing business advice. While some well-rounded lawyers do it all, most bankruptcy lawyers choose to focus either on the litigation-side or the transactional-side of the practice. That said, it is not unusual for bankruptcy litigators to do non-bankruptcy litigation, and for transactional lawyers to do M&A work outside of the bankruptcy arena. Indeed, versatility is the hallmark of the typical bankruptcy lawyer.

Bankruptcy practice can be very fast-paced. It is not far off the mark to think of a business debtor as a patient on the emergency room operating table. There will be times when deals must be made or issues litigated very quickly or else the debtor/patient could suffer irreversible damage or die. Issues may arise unexpectedly and need to be solved quickly. This is true not only for the lawyer representing the debtor, but also for the lawyer representing a lender, a secured creditor, an unsecured creditor, a creditors' committee or a purchaser of assets, among others.

In reality, bankruptcy lawyers spend only part of their time dealing with matters in federal bankruptcy court. Much of a bankruptcy lawyer's work is done out-of-court. For example, bankruptcy lawyers may be called upon to negotiate financial and legal issues in an effort to avoid a bankruptcy case altogether, or they may be asked to analyze the parties’ respective rights in anticipation of a potential bankruptcy filing. They may be called upon to negotiate and document a financial transaction out-of-court, but effectuate it in court. They may be required to litigate bankruptcy issues on a very aggressive schedule. Regardless how the assignment arises, the bankruptcy lawyer’s work is likely to be done in the shadow of the Bankruptcy Code, which can dramatically change the dynamics of the problems that landed the parties there in the first place.

Most banking and bankruptcy lawyers work in private practice at mid-size to large law firms or boutiques, or even in a solo practice (particularly in a “consumer” bankruptcy practice). Bankruptcy lawyers can practice just about anywhere, but chances are that bankruptcy lawyers with a business practice will be called upon to deal with cases filed in New York and Delaware at least some of the time. Many larger companies often have “in-house” banking or bankruptcy counsel. Some opportunities exist in the public sector such as those with the Federal Reserve Banks, the FDIC or the Treasury Department.

 
Open to see details
Your Map

Related Law Courses by Topic

152 items