BIELLI & KLAUDER, LLP: THE BANKRUPTCY BOUTIQUE DEFTLY NAVIGATING ITS CLIENTS THROUGH CHOPPY FINANCIAL TIME

Since nationwide lockdown orders in response to Covid-19 were put into place in late March, many sectors of the economy have been devastated affording lawyers who specialize in bankruptcy law a surge of new business. Large law firms with multiple practice areas are “staffing up” their bankruptcy departments to meet demand, while smaller boutique law firms have seen a significant increase in their caseload. In order to gain more insight into the impact this recent uptick has had on the bankruptcy industry, we recently spoke with Thomas Bielli, partner and co-founder of Bielli & Klauder, LLC to get his perspective on the increase of Chapter 11 filings, as well as the future of bankruptcy law.

Bielli and his partner, David Klauder founded Bielli & Klauder, LLC in 2015, focusing their practice on commercial and corporate bankruptcy, as well as commercial litigation. With offices in Pennsylvania and Delaware, the firm has experience with bankruptcy cases of all types. “Our primary jurisdictions [Pennsylvania and Delaware], are quite diverse,” said Bielli. “Delaware is the hotbed for Chapter 11 filings, while Philadelphia lends itself more to a debtor's practice on a smaller scale.” His experience in two unique markets has allowed Bielli to witness first-hand the increase of large bankruptcies, but also the effect of pandemic-related court closures on smaller consumer bankruptcies. “There has already been a boom in the larger Chapter 11 cases, and I think it will trickle down to the smaller consumer cases in the fourth quarter of 2020, and the first quarter of 2021.”

While Bielli acknowledges that the pandemic-related increase in bankruptcy filings has been good for business, he emphasized that the decision to file bankruptcy is never an easy one for any company or individual, and he understands how stressful the process can be. “We represent individuals and companies with serious financial problems and bankruptcy can often be a practical solution, Bielli said. “But most of the bankruptcies we are working on are from a debtor’s perspective, and I always tell clients, ‘no one wants to file bankruptcy, bankruptcy is not fun.’” Bielli continued, “it is expensive, it is painful, and it is a last resort.”

On April 8, 2020, Dave Klauder was appointed as Fee Examiner in the In re Purdue Pharma L.P., et al., bankruptcy cases pending in the United States Bankruptcy Court for the Southern District of New York. Bielli explained how the firm was retained for the Purdue Pharma case. “My law partner, Dave has been the fee examiner in approximately ten cases during his career, and has developed a great reputation amongst U.S. Trustee trial attorneys, bankruptcy practitioners and judges. His reputation as a fair and diligent attorney relates back when he was working in the Trustee Program and continues now in private practice.” 

According to Bielli, Purdue is their largest bankruptcy fee examination engagement to date, and what ultimately led the firm to seek the services of Legal Decoder, Inc. Bielli discussed the challenges he faced in handling the fee examination in a case as large as Purdue, “I can have lawyers reviewing thousands and thousands of pages of documents looking for problematic entries, but the cost of man hours and risk of human error was just too high.” After reading about Legal Decoder’s experience in other large bankruptcy cases such as PG&E and Toys “R” Us, Bielli decided that partnering with Legal Decoder and utilizing their legal spend management software was the best option.

Legal Decoder’s Legal Spend Analysis (LSA) Compliance Engine intelligently automates the invoice review process provides superior data analytics that identify key trends and actionable information.  The proprietary rule set developed by Legal Decoder includes 46 unique flags to highlight a professional firm’s compliance with the mandate of Section 330 of the Code and the U.S. Trustees Guidelines, as well as staffing and workflow efficiency levels, and billing hygiene. “When a fee examiner like Dave Klauder uses the data analytics provided by LSA, we can give more transparency to the process and show that the information was reviewed by a third-party who prepared a report, Bielli stated. “In addition to the court looking over the bills, it gives an independent eye and shows that there were negotiations and concessions.” He also emphasized the importance of ensuring a fee examiner’s role runs smoothly and is cost-effective. 

When asked how he would imagine working on the Purdue Pharma case without using a data analytics tool such as LSA, Bielli said, “Burdensome - the amount of fees and data in this case alone is huge.” He noted that although it could “probably be done,” it would not be as efficient in terms of time and money. “I think its invaluable investment,” he said.