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Kirkland & Ellis is a dominant market leader in large corporate bankruptcy advisory, representing debtors in around 20 percent of major public company filings from 2011 to 2020 — more than double its nearest competitor.
As a result, the firm seems to command extraordinary influence over which bankruptcy courts become preferred choices for filers: a Bloomberg Law analysis of case filings, released earlier this week, details how Kirkland leverages this power to shape the bankruptcy landscape to its liking, strategically shifting its cases between favored venues and punishing those that fall out of line.
For decades, Delaware was the go-to venue for the firm’s major Chapter 11 filings. But in 2015, Delaware bankruptcy judge Christopher Sontchi harshly criticized Kirkland's tactics as debtor’s counsel for Samson Resources Corp. after counsel expressed a fear that lenders would “kill” the company if Samson didn’t get its way.
“I’m trying to remember if I’ve ever been this furious in my career,” said Judge Sontchi. “And you don’t want me to make a decision when I’m this angry, but you’re being pigs, hogs. You’re asking for something I don’t want to give you, and you’re saying you’re going to kill the company if I don’t.”
Kirkland's response: after filing a case in May 2016, the firm didn't bring another bankruptcy to Delaware until October 2017 — an unusually long absence for such a prolific filer.
For many districts, a steady stream of large filings influences the number of bankruptcy judge positions they can justify. And, for their own careers, judges understandably prefer their district be as high-profile as possible, creating an incentive structure that strongly favors the pursuit of greater case volume and significance.
A similar story to Delaware also played out in the Eastern District of Virginia, which Kirkland had almost single-handedly transformed into a bankruptcy hotspot through the late 2010s. With just two judges handling large cases, Richmond's court developed a reputation for predictability and had become a favored venue for major filings. One of those judges, Kevin Huennekens, was a former partner at local firm Kutak Rock, which Kirkland frequently brought in as co-counsel.
In January 2022, U.S. District Court Judge David J. Novak issued a scathing critique of Judge Huennekens' handling of the Ascena Retail Group bankruptcy, in which Kirkland represented the debtor. Judge Novak condemned the "shocking" breadth of third-party releases granted in the case, which he said "close the courthouse doors to an immeasurable number of potential plaintiffs."
After last filing in Richmond the month before Judge Novak's ruling, Kirkland has not brought a single new bankruptcy to the Eastern District of Virginia since.
In recent years, the Southern District of Texas has been one of the firm's most favored locales, driven in part by favorable rule changes enacted by former Judge David R. Jones. Like Delaware, Jones was one of two primary bankruptcy judges in Houston and had ties to Kirkland — the firm frequently partnered with local firm Jackson Walker, whose lawyers included former staffers of Jones.
In October 2023, Jones resigned amid a well-publicized ethics scandal involving his undisclosed romantic relationship with a Jackson Walker partner. Kirkland has not filed a single new case in Houston since, a venue whose cases had contributed more than $162 million in fees over recent years, according to court filings.
Critics say venue shopping tactics raise serious questions about the integrity and fairness of the bankruptcy process. Regardless of true impact, the optics of Kirkland's antics have invited criticism over possible violation of the integrity of the bankruptcy process and the perception of a two-tiered justice system.
The concentration of cases in a handful of courts also raises concerns about judicial independence and the potential for regulatory capture, particularly given the implicit pressure on judges to rule favorably or risk losing future filings.
Some districts have taken steps to address these concerns: both the Southern District of New York and Eastern District of Virginia now use random case assignment for large Chapter 11 filings, and a group of bankruptcy academics and industry organizations recently urged the federal judiciary to require random assignment of large bankruptcy cases among all judges within a district.
But, for now, it's business as usual for Kirkland. The firm has recently increased its filings in New Jersey, which may signal the next emerging hub for major Chapter 11 cases has been chosen.
Until something changes (such as random case assignment), the firm has positioned itself as the beneficiary of an enviable positive feedback loop. Venue shopping has the potential to help clients, and Kirkland appears best able to extract that benefit. Prospective clients will naturally hire the firm they believe will deliver the best outcome, further growing Kirkland’s market share and judicial sway.
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