Amid a slump in the oil and gas sector, law firms are busily recruiting attorneys with expertise in bankruptcy law. The latest mid-market firm to ramp up its restructuring practice is Barnes & Thornburg.
Raymond Urbanik, who previously practiced law at Munsch Hardt Kopf and Harr, joins Barnes & Thornburg as of counsel in the firm’s new Dallas office. Urbanik advises lenders, debtors, trustees, and the purchasers of assets in restructurings.
“We are seeing an increase in bankruptcy filings in the U.S , and the increase is primarily related to the energy industry. Initially we saw some very troubled companies file for bankruptcy in early 2015, but these businesses were already highly distressed,” Urbanik told IFLR1000.
“More recently, there have been a greater number of filings by exploration and production companies and oil field service companies in Texas, Louisiana, and Oklahoma. If it’s a larger business, possibly with different types of indebtedness, they may file in Wilmington, Delaware. These filings are for businesses with bank debt that is due and can’t be repaid and the company may seek to sell all or part of its assets in a Section 363 sale process. This includes both oil field services and exploration and production companies. I would say that the mix right now is 50/50,” Urbanik observed.
Urbanik described his practice as having a strong regional focus, whether the work is for debtors, trustees, and/or committees. He said that restructuring lawyers anticipate increased work in the energy space over the next year, though at the end of the day, the number of filings may not be huge. Some of the energy companies, Urbanik noted, do in fact have a range of alternatives to a bankruptcy filing. These include pre-bankruptcy workout, negotiations with lenders on the terms of loans, infusions of equity by principals, and the sale of assets, Urbanik said.
“The people I speak to in the restructuring industry think there will be more companies that will file for bankruptcy because they just don’t have much choice. They’ll be sold in bankruptcy court where there’ s a tried and true method to sell businesses through the bankruptcy auction process,” Urbanik added.
Urbanik earned his law and undergraduate degrees at Duquesne University.