His phone wasn’t ringing. Everyone was busy lending, borrowing and making deals.
“There was no insolvency-related work because no one was insolvent,” said Noble of McCraney, Montagnet & Quin in Jackson.
“I didn’t do very much work at all. My services weren’t needed.”
Noble says the lending that was occurring on an unprecedented scale convinced him he’d be getting busy sooner rather than later.
The first up-tick in work came just before the federal government’s 2005 Bankruptcy Code overhaul. The new law, written in a landlord-friendly fashion, gave businesses that filed bankruptcy 210 days to decide whether they wanted to keep their building leases. “They needed to file before the law changed because of huge leases,” he said, noting that high-profile filers included Southeastern supermarket chain Winn-Dixie.
Bankruptcy reform went into effect Oct. 1, 2005. Hurricane Katrina had occurred just weeks before. “Everybody got wiped out on the Coast so there was a consumer rush toward bankruptcy,” Noble said.
By 2007, the air had begun seeping out of the Pillsbury Doughboy that the over-inflated U.S. economy had become. Finding themselves awash in bad debt, banks quit lending.
“I knew that work was going to come, that good companies would be in trouble without the availability of good credit and capital,” Noble said.
Noble’s counterpart at Butler Snow, Steve Rosenblatt, said work has been quite steady the past several years. Butler Snow has five attorneys who do bankruptcies full time and three or four who devote substantial time to bankruptcy work.
“We’ve been very busy as a firm,” said Rosenblatt, who heads Butler Snow’s financial services group. “The trend in recent years is for the big money centers to be way into bankruptcy — Delaware, the Southern District of New York, Chicago.
“In Mississippi, we don’t have a lot of the high-dollar cases that are filed every year. But we have a lot of the pop-and-mom cases that might be in the $3-million to $10-million range that need to be taken care of.”
Noble and Rosenblatt said their business bankruptcy work won’t slow down until banks return to more vigorous lending.
“The banking activity is really the driver,” Noble said.
“I think we will see even more bankruptcies in the next couple of years,” Rosenblatt said.
“It’s just hard out there. I think more and more companies are out there on the edge just hanging on.”
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