JCPenney department store located in a mall in South San Francisco bay. JCPenney department store located in a mall in South San Francisco bay. Photo: Shutterstock

The economic pain caused by the coronavirus outbreak has been unrelenting, hitting nearly all industries and sectors. As the first waves of affected businesses explore their restructuring options or succumb to bankruptcy, many are turning to a giant in the practice for help.

A string of companies in recent days have tapped Kirkland & Ellis to advise on potential bankruptcy filings or lodge Chapter 11 petitions. The firm, which is poised to once again top the Am Law 100 with more than $4 billion in revenue last year, has a proven track record of advising large restructurings and is bound to be among the firms dominating bankruptcy work stemming from the pandemic.

Frontier Communications, which provides internet, TV and phone service in 29 states, filed Chapter 11 paperwork in the Southern District of New York on Wednesday and reported owing between $10-$50 to more than 100,000 creditors. With Kirkland as its legal adviser, the company said it had entered a restructuring support agreement with 75% of its bondholders, representing about $11 billion in bonds and had secured $460 million in debtor-in-possession financing.

Department stores, which were already struggling before COVID-19, have been hit especially hard by the pandemic due to stay-at-home orders and nonessential business closures in multiple states. Kirkland has been tapped by Macy's and J.C. Penney to explore bankruptcy filings, according to Reuters.

Kirkland is also advising satellite service Intelsat and fracking company FTS international, according to Bloomberg and The Wall Street Journal, respectively. On the energy front, Chesapeake Energy Corp., buffeted by both an oil price war and the pandemic, has hired Kirkland to advise on restructuring matters, the Journal and others reported. A West Virginia-based coal plant operator, Longview Power LLC, tapped Kirkland to file a prepackaged Chapter 11 restructuring plan Tuesday in Delaware.

Representatives for Kirkland did not immediately respond to request for comment.

Many large firms in the past two years have worked to build up their restructuring groups in anticipation of an economic downturn, but as the coronavirus has reversed years of economic gains overnight, legal analysts predicted that institutional powerhouses with deep benches and a track record of success will reap the immediate restructuring work due to the economic fallout.

"The firms that are mostly in place and ready to go are going to be the initial beneficiaries—think Kirkland & Ellis; Weil, Gotshal & Manges; Akin Gump; and Milbank," said Jon Truster, co-head of lateral partner placement at Greene Levin Snyder, in an interview last month.

In Kirkland's case, the firm is handled some of the most high-profile Chapter 11 filings of the past year, including retailers Forever 21, Barneys New York, FullBeauty Brands, Things Remembered, Destination Maternity, Pier One and Acosta, as well as energy companies including McDermott International, Vanguard Natural Resources, Jones Energy and Murray Energy.

The firm is well-equipped to take on even more work. Of the more than 1,000 U.S.-based partners, associates and of counsel who joined Am Law 200 firms since the beginning of 2018, Kirkland made more hires—63—than any other firm, according to ALM data. It's an investment that will pay dividends, as large bankruptcy proceedings can mean a big payday for a law firm: in the Toys "R" Us bankruptcy, which wrapped up last year, Kirkland lawyers billed more than $56 million.

Even as Kirkland's bankruptcy practice heats up, some of its lawyers are finding opportunities elsewhere: A seven-year veteran in Chicago hopped to Sheppard, Mullin, Richter & Hampton's finance and bankruptcy group Wednesday, while Akin Gump Strauss Hauer & Feld, another bankruptcy powerhouse, lured away another former Kirkland partner Monday in Houston.

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