A slowdown in chapter 11 filings has led law firms to trim their ranks and steer bankruptcy attorneys into other areas, according to a New York Law Journal article yesterday. "Firms across the board have been trimming their restructuring practices because there's been a pronounced slowdown in the field," said John Rapisardi, a partner in O'Melveny & Myers and co-chair of the firm's restructuring practice. While some attorneys say the "bankruptcy recession" will end when interest rates rise, others believe the change is long-lasting. Nationwide, the number of all bankruptcies, both corporate and personal, has been on the decline. "If you ask any honest restructuring professional, they will tell you business is slower than it was a couple of years ago because there are fewer companies that are being restructured," said Stephen Lerner, chair of Squire Sanders's restructuring and insolvency practice. In addition, there are fewer cases with debts of more than $1 billion. Attorneys point to a number of factors for the decline, including an improving economy, low interest rates and more investors willing to put funds into distressed companies outside of bankruptcy.
