You know that feeling you get when you meet the real deal?
It takes about 0.3 seconds to realize it. Kelley Cornish cuts that mark in half.
Perhaps that’s why corporations know the Paul Weiss partner is among the best in the business when they face a financial crisis.
“You’re arriving at the scene of a train wreck, or a near train wreck,” she explains of her practice, which has helped companies including Sears, Walter Energy, Foresight Energy and AbitibiBowater.
She is a force of calm and reason in the face of stressed executives drowning in debt and pressed by lenders. Triage is often the order of the day: determining what can be saved, what can’t and which problems have to be addressed most quickly.
“You’ve got a lot of constituencies,” explains Cornish, a native of Easton, Pennsylvania, and a graduate of Northwestern Law. She learned her craft at Sidley Austin before joining Paul Weiss, where she has served two terms on the management committee and also serves on the committee that sets partner compensation, among others.
“Internally, at the company, there’s the board and senior management, but there are also the lenders and the equity owners of the company,” she says. “The job, as I see it, is to try to make the best of the situation for all the constituents — hopefully, at the end of the day, through some kind of a deal, some kind of a consensual arrangement that saves the company.”
Lawdragon: It sounds fascinating. How did you get started in this field? Was this a practice you had aspired to?
Kelley Cornish: I started out in litigation at Milbank, Tweed, Hadley & McCloy in New York. It was the 1980s, and a lot of national law firms, including Sidley Austin, were opening branch offices in the city. To me, that sounded like the greatest opportunity. I interviewed with several and selected Sidley Austin, where I began as a litigator in a 35-person office.
My cases included some restructuring matters under Ron Trost, a nationally prominent attorney in the field. I loved him, and I thought the practice was fascinating, so I eventually joined the bankruptcy group. Ron has been a true mentor, and is now like a father to me. My kids call him “Uncle Ronnie.” I first met Ron in the early 1990s and worked very closely with him until he became senior counsel and was heading towards retirement.
LD: What did he teach you about becoming a bankruptcy and reorganization lawyer?
KC: Everything. It's classic for a true mentor. He did not just teach me and serve as an example for me in my practice, but in life. He is a larger-than-life person. In practice, I would say the key things were coming into a complicated situation and trying to simplify it. Getting to the essence of it as quickly as you can. Calming the situation down by providing very early on a simplified and organized, orderly path to a commercial outcome. Which hopefully imposes on your clients some calm and some structure in an otherwise cacophonous situation.
Then in life, just living a very, very full life: Don’t just focus on work.
LD: Like, get out of the office?
KC: Family, hobbies, the arts, etc. Ron lives his life that way. It was always such an example to me, and I have really followed that.
LD: That’s great advice. What cases do you recall working on with him that turned out to be significant learning experiences for you?
KC: There are two that immediately come to mind, although there were many. The very first thing I worked on with him was the El Paso Electric case. The company was the first public utility in modern times to actually go into Chapter 11 bankruptcy. I was a pretty young partner who had just moved over to the bankruptcy area a few years before, and we teed up a sale of the company that, for a variety of reasons, ended up not happening after about a year in Chapter 11. We had to literally turn the barge and move to a reorganization of the company. That one taught me that you just have to hang in there. The world can come crashing down, and you just have to stay the course.
It's the whole discipline of being orderly, being calm. There's always a solution. Then the company actually did reorganize.
LD: Wow. That’s a stupendous outcome.
KC: It was a great thing. But the second case was really, in my view, the turning point of my career in terms of taking that next step that everyone must do to become a first chair. That involved the bankruptcy of Warnaco, which owned Speedo/Authentic Fitness and some other well-known brands including Polo and Calvin Klein, and was run at the time by CEO Linda Wachner. It had $2 billion of bank debt, which isn’t a big deal today, but was unheard of at the time. Ron and I were retained to represent the company.
Ron really stepped back, and let me run that matter. We convinced Citibank, which held a lot of the debt, to essentially convert its debt to equity in the company. It was a public company that was then owned essentially by the bank, but we came out of Chapter 11.
I was dealing with a board of directors that included Harvey Golub, the retired chairman of American Express; Joe Califano, the Secretary of Health, Education and Welfare in the Carter administration; and Frank Olson, the former CEO of Hertz. This was a blue-chip board. It was tough and difficult. Ron, literally, was there for me. But I ran that matter, and it really launched me into the next level of my career.
LD: When you know it's time for you to be at the front of the stage …
KC: And somebody actually lets you do it. Not just lets you do it, but actually supports you in doing it.
LD: What drew you to restructuring? I realize it has some of the elements of litigation, which you started in, but it’s also transactional.
KC: It is very much transactional, but there are a lot of court appearances. The way you get to, hopefully, an arrangement that saves the company is often through litigation. I tease our litigators here at Paul Weiss, but it's absolutely true and they acknowledge it, that I am on my feet in court in front of judges far more often than they are. And that’s true at every firm. To me, it was just the best of both worlds. The aspects of litigation that I wasn't wild about, which were the heavy document discovery, writing nasty letters back and forth …
LD: All the posturing.
KC: Exactly. You can't do that; it's triage in restructuring. You absolutely have to stake out the positions and tee up litigation in order to either decide critical issues or drive the parties to a resolution. But you don't get bogged down.
LD: Right. You have to mean it a little bit more.
KC: You have to mean it, and you'll also have to actually, quickly, do it. One of the things our litigators love about our practice is that they’re immediately handling mini-trials. The discovery only lasts a month. It doesn't last five years. Paul Weiss litigators really enjoy our litigation for that reason. They are a key part of the team we offer to our clients.
LD: So how did you come to move to Paul Weiss from Sidley Austin?
KC: As the Warnaco matter was winding up, in 2003, Paul Weiss partner Alan Kornberg reached out to me out of nowhere. I had no intentions of leaving Sidley. None, not a thought. I was on the executive committee there, I was doing very well. After a long, long courtship, I met with him for breakfast at the Carlyle Hotel, basically because I love him. I knew him from Milbank Tweed, when I was a first-year associate and he was an experienced partner. I have always had the highest respect for him. He called me and said, "Would you meet with me, talk?" And I said, "Okay. I'm not leaving Sidley, but I'll have breakfast with you." At the time, Bob Drain, Judge Drain, was a partner here, and had decided to go on the bench. The group was looking for somebody who might come in at his vintage and level, which I am, and who had some company-side experience, which I did. Long story short, I came here in 2003.
LD: And since you joined Paul Weiss, you’ve handled some really high-profile, complex cases, including Sears’ restructuring, for instance.
KC: Sears, yes. There are many others, too, including Penn Traffic grocery and AbitibiBowater, the paper products company, during the financial crisis. The Sears opportunity came to us through my partner Paul Basta as the board prepared for the bankruptcy, given all the related-party transactions involving Eddie Lampert, the hedge-fund manager who was the CEO, his funds and others. Paul asked me to work on it with him. We put together a whole team of litigators, led by Lew Clayton.
We investigated potential claims against the insiders and others, and filed a lawsuit bringing hundreds of millions of dollars’ worth of claims. My litigation partner, Lew Clayton, has brilliantly led that litigation for the firm and for the clients. Then we also were intimately involved in the negotiation of the going-concern purchase of the company by Eddie Lampert.
LD: Your practice sounds amazing.
KC: It's fun. And Paul Weiss is a great firm. What really, absolutely convinced me to come here is that the lateral partnership process is very rigorous. Every partner here has the opportunity to meet a potential lateral partner. You have these meetings in conference rooms, where 10, 15 or 20 Paul Weiss partners come and they meet with you.
LD: At the same time?
KC: At the same time. You start with a few to see whether there's interest on both sides. But once you get to a point where it appears there is, then we do this thing where everybody gets to meet the candidate. I met probably two-thirds of the partners. I absolutely fell in love with these people. I found them to be brilliant, fascinating, interesting, open-minded and civic- oriented. And for me, as a woman and a gay person, it’s very important that it’s a place that’s focused on social justice, diversity and inclusion. That's what drew me here in 2003. It has continued since then.
You can imagine, for me, what it was like to be here when the Supreme Court ruled on U.S. v. Windsor, deciding that the Defense of Marriage Act was unconstitutional and that the government couldn’t discriminate against gay couples regarding federal benefits and protections.
LD: That must have been amazing.
KC: When I got married, the Windsor case was still pending, and I literally thought while walking down the aisle how grateful I was to be associated with this place.
It's actually unbelievable to me, that in my lifetime, Linda and I were able to get married and have our boys, and I've adopted my boys and everything else. The fact that my own law firm was the catalyst for that is astonishing, to this day.
About the Author: Katrina Dewey (firstname.lastname@example.org) is the founder and CEO of Lawdragon, which she and her partners created as the new media company for the world’s lawyers. She has written about lawyers and legal affairs for 30 years, and is a noted legal editor, creator of numerous lawyer recognition guides and expert on lawyer branding. She is based in Venice, Calif., and New York. She is also the founder of Lawdragon Campus, which covers law students and law schools.