Memoir of My Time as a Bankruptcy Lawyer
by Josiah M. Daniel, III
Fellow, American College of Bankruptcy, Class 18
November 6, 1978, was a doubly propitious date: the issuance date of my law license and the date Jimmy Carter signed the Bankruptcy Reform Act into law. After a career in bankruptcy, I’m now in a second career of legal history, including the history of bankruptcy. This is my personal history of forty years’ practice under that bankruptcy law.
After graduating with the B.A., history as a career was my first thought, and among good memories of two years as a grad student in history at UT Austin is meeting my wife of 47 years, Susan, there. When the academic pathway proved unpromising, I transferred to UT’s law school in 1975. I liked the contracts and commercial-law courses taught by a then-young David Epstein, but I lacked the foresight to take his bankruptcy course the third year (what I actually said, I remember, was, “I can’t imagine why anyone would take that course!”).
And as far as I could tell in 1978, my first employer, the Underwood Law Firm in Amarillo, did no bankruptcy work. But in autumn 1979 a partner tossed a pamphlet of the Bankruptcy Code on my desk, remarking, “Congress has changed the bankruptcy law. Take a look and see what you can make of it.” The next thing I knew, another partner took me to the federal courthouse for a hearing before the 90-year old bankruptcy judge, Frank R. Murray, on final reports as Chapter 7 trustee in two Bankruptcy Act cases—the partner said that was all the bankruptcy work the firm had, and he intended never to set foot in bankruptcy court again.
Then the first years of the ’80s happened—harsh in economic effect upon Texas, with 19 of the 20 largest banks closing and the price of oil and of commercial buildings plummeting. Suddenly the bank client for whom I had been drafting lending papers began receiving many notices of Chapter 11 petitions by borrowers. So I had the opportunity, really the imperative, to learn the Code.
On behalf of that bank, I attended the first hearing in the large Chapter 11 case of James T. Harmon and his cattle companies, and I watched Dan Stewart, the Dallas lawyer for the examiner-with-expanded-powers, Walter Kellogg, conduct a lively in-court dialog about the new Code with the judge who replaced Murray, Bill H. Brister, including likely issues of “avoidable transfers via the strong-arm clause,” “rejection” of supply contracts, the “indubitable equivalent as a form of adequate protection," and “cramdown.” I was hooked; I wanted to be able to talk like that!
In 1982 or ‘83 I attended a one-week summer seminar on Chapter 11 at UT Law School taught by Epstein and Jay Westbrook—my only formal training in bankruptcy law! My longer-term tutor was Judge Brister, before whom I was appearing constantly in the avalanche of cases, and from whom I learned that equity is the spirit that animates the cold words of the Code. He left the bench in September 1984 to join the Winstead firm.
By then I had had extensive dealings with Dallas bankruptcy lawyers, and a relocation to that city and joining the Winstead firm was natural in 1986—Judge Brister supplied the opportunity. Later, in 1999, I joined Vinson & Elkins, from which I retired December 31, 2017. The last 18 years were the best.
Disregarding dollar amounts, the highlights of my bankruptcy-law career were:
• saving an insolvent rural public hospital in Quanah, Texas, thus saving the small town, by cramming down a Chapter 9 plan in a case before Judge Harlin D. Hale• they said it couldn’t be done, but cramming down a Chapter 11 plan for a mom-and-pop limited partnership that operated a golf course before Judge Brenda T. Rhoades• participating in a cert response in a judicial-estoppel case, gaining admission to the Supreme Court• cramming down a Chapter 11 plan in a non-personal-injury mass-tort case before Judge Basil Lorch in the Southern District of Indiana, affirmed by the 7th Circuit• representing an individual before Judge Barbara Houser in a Chapter 11 case with difficult SEC and IRS claims• representing parties in Chapter 11 before Judges Robert C. McGuire, Harold C. Abramson, and Stephen A. Felsenthal of Dallas and all the Texas judges plus judges in Oklahoma, South Carolina, Kansas, California, Hawai’i, and Delaware• a lot of restructuring, and structuring, advisory work too.
A smorgasbord of my contributions to bankruptcy literature:
• A Proposed Definition of the Term “Lawyering,” 101 L. LIB'Y J. 207 (2009)• Rx for Ailing Rural Public Hospitals: Chapter 9 Bankruptcy and Pro Bono Lawyering, 18 HOUS. J. HEALTH L. & POL’Y 205 (2018)• “Even if a Party Has a Change of Heart”: A Framework for Enforcement of Courthouse-Steps Settlements…, 52 TEX. TECH L. REV. 199 (2020)• What Can the Past Teach Today’s Bankruptcy Law Students, Lawyers, Judges, and Restructuring Professionals?: An Annotated Bibliography of Histories of Debt and Bankruptcy, papers.ssrn.com/sol3/papers.cfm? abstract_id=3954504 (Nov. 2021)• Lawyering on Behalf of the Nondebtor Party in Anticipation, and During the Course, of an Executory Contract Counterparty's Chapter 11 Bankruptcy Case, 14 HOUS. BUS. & TAX L.J. 230 (2013)• The Landlord’s Rejection-Damage Claim Under Bankruptcy Code § 502(b)(6): Lawyering the Allowed Claim Amount with Graphic and Mathematical Expressions, 31 ABI JOURNAL No. 11 (2013)• Listserv Lawyering”: Definition and Exploration of Its Utility in Representation of Consumer Debtors in Bankruptcy, 11 ST. MARY’S J. MALPR. & LEGAL ETHICS (2021)• Arbitration in Bankruptcy Cases…, 43 TEX. J. BUS. L. 447 (2009)• A Law and Economics Tale or a Legal History Story?: Finding and Telling the Story of Congressman Hatton Sumners and the First and Second Municipal Bankruptcy Acts, 1933-1938 (forthcoming).
Moving from practicing lawyer to full time legal historian when I retired was natural. Today I’m a Visiting Scholar of UT Austin’s History Department and am writing the biography of Dallas congressman Hatton Sumners (1875-1962), a complex figure who chaired the House Judiciary Committee 1931-1947. I’ve been reviewing his archival papers in the Dallas Historical Society and the National Archives. An aspect of Sumners's persona is repugnant—i.e., racism—but he crafted important enlargements of the Bankruptcy Act during the thirties and forties.
I practiced bankruptcy law because I found I had an aptitude, and no one else in my first law firm wanted to do it. I continued to practice it after moving to Dallas because the work paid well, and I had a family to support. Now I am not being paid at all and am quite content doing what I originally wanted to do: researching and writing history, but with a bankruptcy and legal flavoring.
I’m honored to be an American College of Bankruptcy Fellow (Emeritus) and pleased to offer this retrospective of my career in bankruptcy, 1978-2017.