“Texas lawyers see opportunity in bankruptcies”
An expected landslide of energy-company bankruptcies will spread to other local industries, starting with commercial real estate because of the large number of vulnerable companies with downtown office space, say Texas lawyers who are preparing for a growing workload.
“The Chapter 11 practice was all but dead in Texas the past several years,” said Demetra Liggins, a partner in the bankruptcy section at Thompson & Knight in Houston. “We had nowhere to go but up.”
Liggins, who started practicing law in Houston just days after Enron Corp. filed for bankruptcy in 2001, said distressed companies employed the “extend and pretend” method during the past six years, meaning lenders would simply extend the terms of the debt when loans came due and could not be repaid.
“Many oil and gas companies are finally approaching the point where they can no longer extend and pretend,” Liggins said. “Bankruptcy is the only option.”