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They’ve Got Next: Fresh Face Candace Arthur

Nov. 27, 2020, 11:00 AM

Candace Arthur calls restructuring problems Scooby-Doos: they appear unsolvable at first, but can be unmasked with a bit of persistence, ingenuity, and “mental gymnastics.”

A partner in Weil, Gotshal & Manges LLP’s restructuring department, Arthur enjoys finding creative solutions for her corporate clients.

“At the end of the day you’re a problem-solver,” she told Bloomberg Law. “I try not to make things black and white because I don’t think the bankruptcy code is black and white.”

Arthur graduated from Georgetown University Law Center in 2009 and clerked for Judge Robert E. Gerber at the U.S. Bankruptcy Court for the Southern District of New York. Since joining Weil in 2010, she has served as debtors’ counsel in high-profile bankruptcies including J.Crew, Sears, Insys Therapeutics, Southeastern Grocers, and Lehman Brothers.

In 2017, J.Crew Group Inc. presented Weil’s restructuring team with one of those Scooby-Doo monsters that Arthur helped unmask.

The retailer was struggling with debt and needed funds, but had no unencumbered assets for collateral. In a never-before-tried maneuver, the team created a series of subsidiaries that simultaneously sheltered J.Crew’s intellectual property assets from existing lenders while giving the company enough collateral to raise $127 million and de-lever its balance sheet by approximately $340 million.

“It was really taking a fresh approach,” Arthur said. It was so innovative, in fact, that “getting J.Crewed” soon became used in bankruptcy circles as a verb.

Arthur worked again with J.Crew this year when it filed for bankruptcy during the pandemic, pushing the company through a successful restructuring in just four months.

A record-breaking track star during her undergrad years at Yale, Arthur no longer sprints but still trains for each case with the same athletic rigor, quickly getting up to speed with whatever new knowledge she needs to be effective.

When she was assigned Lehman Brothers as her first case, “I went on Khan Academy trying to figure out how to do a derivative,” she said. Since then she’s learned to value energy assets, gotten to know the retail industry, and expanded her legal know-how from employment law to tax.

“It runs the gamut,” she said. “My life changes every quarter.” Every case has taught her something new and made her grow in different ways, she said.

Arthur cites the 2015 bankruptcy of the Great Atlantic & Pacific Tea Co., the grocery chain more commonly known as A&P, as the pivotal case in her career when she felt like she became a “real lawyer” rather than “playing dress up” at moot court.

The case was complex, including the sale of more than 300 store locations in a one-day auction. It was the first time she’d argued a contested matter.

“Candace went up to the podium. She had no notes,” remembers Ray Schrock, co-chair of the firm’s restructuring department who worked with Arthur on the case. She then flawlessly laid out legal arguments rebutting objections from multiple landlords, complete with legal references and case law citations.

Schrock has become one of her strongest supporters since then, Arthur said. “He saw a lot of things in me early on and he supported that,” she said.

She now works to pass it on, taking junior associates under her wing and mentoring whenever she can. Associates said her door is always open and she works just as hard as they do, staying up late alongside them to draft documents when it’s crunch time. She also keeps them laughing, with a devastatingly dry wit and an infectious laugh that echoes down the hall.

“People never have a bad word to say about Candace,” said Schrock. “She’s a really fantastic lawyer, and an even better person.”

To contact the reporter on this story: Leslie A. Pappas in Wilmington, Del. at lpappas@bloomberglaw.com

To contact the editors responsible for this story: Lisa Helem at lhelem@bloombergindustry.com; Laura D. Francis at lfrancis@bloomberglaw.com

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