Most Admired Attorneys: Skadden’s Jack Butler

Guiding auto parts supplier Delphi Corp. through a trailblazing restructuring — which one lawyer compared to Dante’s “Inferno” — required Skadden Arps Slate Meagher & Flom LLP’s Jack Butler Jr. to assume a wide array of roles including strategist, motivator and fierce negotiator, part of what makes him one of Law360’s 10 Most Admired Bankruptcy Attorneys.

To be sure, Butler’s renown in the bankruptcy world isn’t limited to Delphi: The 54-year-old co-leader of Skadden’s corporate restructuring practice also played leading roles restructuring US Airways Group Inc., Xerox Corp. and Kmart Corp., the latter standing as the largest retail bankruptcy in history. Butler also served as special counsel to Enron Corp. and The Warnaco Group during restructurings.

But his work on Delphi, besides being freshest in the minds of colleagues and adversaries, stands out for two reasons, according to his peers. First, it required a level of commitment most people couldn’t handle, said Peter Atkins, a senior corporate and securities partner at Skadden. Second, its importance from an economic standpoint — essentially keeping the auto industry afloat — is hard to match, according to J. Gregory Milmoe, co-leader with Butler of Skadden’s corporate restructuring practice.

Butler agreed in writing to devote as much time as physically possible to Delphi, flying to its Michigan headquarters weekly for Monday meetings with executives. Speaking with Law360 on Monday, he described himself as being almost exclusively seconded to the case as it unfolded between October 2005 and October 2009. His efforts were critical in enabling the auto industry to pull through recession, Milmoe said. “The [General Motors Corp. restructuring deal] went through with astonishing rapidity,” he said. “That’s because the answers had basically been worked out in Delphi.”

The company filed for Chapter 11 in October 2005 amid struggles to diversify its business after being spun off by GM. Delphi on multiple occasions looked ready to emerge from bankruptcy only to meet with disappointment, first from private equity firm Appaloosa Management LP, which in April 2008 pulled out of a $2.55 billion debtor-in-possession deal just prior to closing. Delphi was told by lenders to prepare for liquidation in April 2009 after the U.S. government wavered on a commitment to let GM finance the company. In June 2009, another deal involving Platinum Equity LLC and the U.S. Department of the Treasury looked promising until protests from lenders forced the U.S. Bankruptcy Court for the Southern District of New York to call for an auction. Delphi finally emerged in October after GM and a group of lenders made a successful bid at auction, saving the company from a potentially cataclysmic collapse.

“It was obviously very difficult and demanding, and yet I honestly believe, had we gotten it wrong, the country would be in a depression right now,” Butler said.

Such commitment was always apparent from Butler, but manifested itself in different ways, according to lawyers involved in the case. Skadden mergers and acquisitions partner Eric Cochran said Butler motivated Delphi’s board to stay positive when lenders predicted liquidation. “That was probably the most cinematic moment,” Cochran said. “We didn’t have a board that panicked. [Butler] kept us marching forward. We believed eventually people would see the value proposition here, and that was ultimately exactly what happened.”

Weil Gotshal & Manges LLP restructuring partner Jeffrey Tanenbaum, who represented GM in the Delphi case, said Butler could also be a tenacious negotiator and advocate. “There was not a lot of love between our clients, and there were a lot of gun-to-the-head type situations,” Tanenbaum told Law360. “But we needed each other very, very badly. We had to trust each other, and you can trust Jack.”

Butler floated plenty of carefully crafted ideas during the restructuring, though peers said his reputation for strategic thinking was established long before Delphi. “In general, he can see around corners other people don’t even know exist,” Atkins said. Butler said he made an effort to chart out clearly marked paths during negotiations. While some lawyers are fond of the shock-and-ave approach, he prefers when adversaries can anticipate his moves, he said. “When you’re trying to get a deal done, people need to be able to see where you’re going, so they respond,” Butler said.

Adversaries and colleagues alike praised Butler for his knowledge of the field, but even more so for his ability to organize and call on that knowledge at will. Otterbourg Steindler Houston & Rosen PC’s Glenn Rice called Butler the best-prepared lawyer he’d encountered. “He has notebooks that cover every single matter that’s going on,” Rice said. “He can have 200 matters on the calendar, and every single one of them, he’s got a notebook on it and he’s prepared for it.” Milmoe recounted one partner’s inquiry into whether pension obligations received priority over bondholder claims in municipal bankruptcy. Partners forwarded the e-mail through the ranks, searching for an expert, until it found its way to Butler’s inbox. What ensued was a nearly 1,000-word response from Butler laying out scenarios, citing case law and analyzing trends. “Not bad for off the top of your head,” Milmoe said.

Butler recently published “Navigating in Today’s Environment: The Directors’ and Officers’ Guide to Restructuring,” featuring chapters from leading authorities in the world of bankruptcy. The book is aimed at shedding light on an officer’s role in restructuring — often an unfamiliar topic for corporate executives used to growth and success, Butler said.

But if he has a sharp, business-oriented mind, he’s the first to admit he inherited a significant part of it from his late father, Jack Butler Sr. The elder Butler built retail, real estate, steel and insurance operations from the ground up, starting by orchestrating a leveraged buyout of Detroit department store Demery’s, where he had worked in the stockroom since he was a teenager. Most noteworthy, he did it without going to college, the younger Butler said.

Butler added that he initially planned to go to business school or follow his father into the family business, but his father had a different plan. “He asked me to go to law school,” Butler said. “He’d never asked me to do much, so I wanted to do what he asked. He said, with my business background, that if I went into law, I’d always have a job.” He earned his law degree from the University of Michigan Law School before starting his career at Honigman Miller Schwartz & Cohn LLP in 1980. He later moved to Butzel Keidan Simon Myers & Graham, then joined Skadden in 1989.

Butler said his dad worked hard, often to the point of returning to work after dinner, but knew how to make ample room for other important aspects of his life, such as family. Butler said he inherited the so-called “on-off switch,” and was able to enjoy spending time with partner John, to whom he was married in California in 2008, and the couple’s four young children. Among his dad duties are coaching his kids’ soccer teams and running his church’s education program.

He admits, however, that the call of his profession interferes at times. On at least three occasions, he has left vacations or holiday gatherings to answer that call, including to act as special counsel to Enron around Thanksgiving 2001. He also sped off during the Fourth of July weekend in 2003 when Delphi CEO Steve Miller first asked for help sorting through his company’s issues. “It’s tough, but the work-life balance is something we all struggle with,” he said. “It’s not about being gone, because I’m going to have to be gone a lot. It’s about doing as much as I can when I’m home.”

And if Butler’s commitment to clients occasionally competes with his commitment to family, it’s only because, to Butler, clients are like families in and of themselves, Cochran said. “I think he really does feel the full weight of the importance of the transactions he’s working on,” Cochran said. “These are heart-wrenching issues that involve people’s lives, and Jack is the kind of guy that completely understands that.”

In fact, Butler’s loyalty to his clients has at times grown so tenacious as to earn him a reputation as an overwhelming, intimidating and frustrating opponent. “When he gets into a conflict, he’s there to win,” Al Togut of Togut Segal & Segal LLP said. “He can be a little overwhelming.” But it’s only because he’s so prepared that he causes his adversaries so much grief, Togut added, calling Butler one of the best bankruptcy lawyers in the country.

Tanenbaum acknowledged butting heads with Butler, but said at the end of the day, he was a man that wanted to make a deal, rather than hoard recovery for his client to the point of burning bridges. To be sure, Tanenbaum said, unprepared lawyers would be unwise to tangle with Butler, but as long as you come to the table ready to talk resolution, he’ll work with you. “I don’t want to say his bark is bigger than his bite, but I guess my advice, if you have to go up against him, is don’t be intimidated,” Tanenbaum said. “I’ve worked with him for years. At this point, I just laugh.”

Atkins drew a sharp distinction between Butler and other lawyers known for toughness. “With Jack, it’s all about the job, not ego,” Atkins said. “It’s not because he’s domineering or anything. It’s all about the job, and if something needs to get done, he’ll push to get it done.”

Butler did just that with Delphi, spending four years devoted to the case at the expense of other business, and knowing his reintegration into the bankruptcy world would likely be an adjustment, Atkins said. “It wasn’t just a four-year case, it was four years of the ninth circle of Hell,” he said. “It was Dante’s Inferno every day.”

Still, Butler said he was glad for the experience. “It was really gratifying,” he said. “You saw people with very, very different agendas able to come together.”

*Methodology: From May 25 through June 11, Law360 invited readers to nominate attorneys they admire to be profiled for the “Most Admired” series. Readers were asked: “Is there an attorney you’ve argued against in court who you respect — or whose briefs you fear? What about a lawyer whose views on the latest hot-button issues you eagerly seek out? Or a former classmate who is practicing the law in novel ways?” Survey participants were not permitted to nominate attorneys from their own firms and submissions from public relations and marketing professionals were not considered. Separately, Law360 sought out nominations from practice group heads at the 100 largest law firms in the United States. In total, 1,016 nominations were received. Nominations were reviewed by a board comprising experienced lawyers and Law360 editorial staff. Sixty-five attorneys covering seven practice areas of the law were then selected to be profiled for the “Most Admired” series.*