Sidley Austin is rebuilding the top end of its bankruptcy team by adding the former U.S. chair of DLA Piper’s restructuring practice, Tom Califano, as a partner in its New York office.
For Sidley, the hire could help stabilize its restructuring practice, which has been an important driver of growth for firms since the pandemic tested corporate America’s balance sheets. Levels of distressed debt remain elevated, and bankruptcy watchers anticipate a prolonged period of increased filings.
Califano also served as global co-chair of DLA Piper’s restructuring group. He has been at the firm since the early 2000s, and he focuses on company-side representations for in and out of court restructurings. He represents private and public companies, funds, purchasers of distressed debt, and parties in interest to restructurings, including boards of directors.
While Califano isn’t expected to have a formal leadership title, he will have a senior role in Sidley’s bankruptcy practice by virtue of his experience and stature.
Joining Sidley was an exciting opportunity, he said in an interview, because some of the firm’s major practice groups are crucial to developing a restructuring business. For instance, he pointed to the firm’s healthcare group, which recently recruited former Hogan Lovells leader Asher Rubin. Califano has recently focused on representing healthcare companies in restructuring matters.
“This is truly a unique opportunity that doesn’t come along,” Califano said. “It’s not often you have a firm with the quality and breadth of practices that Sidley has that doesn’t have a fully baked restructuring group. They’ve got a really good, strong group. But there is still the ability for me to make a positive impact, and that’s what I’m looking forward to doing.”
A DLA Piper spokeswoman did not immediately respond to a request for comment on Califano’s departure.
Sidley’s former bankruptcy leaders, New York-based Boelter and Chicago-based Guzina, were picked to run the firm’s bankruptcy practice last year. They replaced James Conlan Patrick Corr who joined Faegre Drinker last June.
Califano said it is difficult to predict when the next wave of companies will file bankruptcy, noting that it’s been easy for many companies to access financing. He does not bring with him to Sidley any active Chapter 11 representations, but he said he continues to represent companies who are “in the lead-up” to restructurings.
“We’re not going to see a lot of restructuring until the end of this year,” he said. “People who needed liquidity could access liquidity. There hasn’t been a reason, really, for creditors to force a restructuring.”
On Monday, Sidley announced another major leadership change, selecting Dallas-based litigator Yvette Ostolaza as its next management committee chair.
“Tom’s reputation in the U.S. restructuring market is second to none,” Jennifer Hagle, a member of Sidley’s executive committee and restructuring group, said in a statement. “Our global team of over 50 restructuring lawyers welcomes him to the group and knows that he will have an immediate impact helping our clients navigate some of the most complicated business challenges.”