Larry Larose, a partner in Winston & Strawn's corporate department and head of the firm's financial restructuring practice in the firm's bankruptcy and insolvency group, was quoted in a Law360 article published January 1, 2012 titled "Bankruptcy Outlook For 2012."
The article suggests that despite a slow year for bankruptcy work in 2011, lawyers and bankruptcy professionals should expect an increase in clients due to the current sociopolitical and economic forecast for 2012. With several major corporate bankruptcies occurring near the end of 2011 and an increase in middle-market restructuring work, combined with the constant debt battles currently facing the EU, lawyers should look forward to a busier year.
However, it is still uncertain just how much of an increase business attorneys should expect. Some say that until the European debt crisis is resolved, banks will continue to act conservatively in their lending. Just how widespread or serious the repercussions of the economic problems in Europe will be remains to be unseen. According to Mr. Larose, market volatility has driven at least one company over the tipping point over the last few months, and it's unclear who is holding the debt and derivatives. "We just don't know where all the risk is," said Mr. Larose. "I suspect it's spread out through all major institutions in the world."
Mr. Larose later goes on to discuss the difficulties for financially distressed municipalities who may want to file for Chapter 9 bankruptcy. In November of last year, Jefferson County, Alabama filed the largest municipal bankruptcy in the history of the United States. "Harrisburg and Jefferson County have been in trouble a long time," Mr. Larose said. "Now, with federal stimulus money running out and the economy not turning the corner, many of them are hitting the wall," further noting that there could be outliers from a case this big.
While many attorneys may see an increase in bankruptcy and restructuring work and Chapter 9 filings, the overall outlook for 2012 remains unclear.