by Pat Milihizer

As the leader of the bankruptcy and restructuring group at Meltzer, Purtill & Stelle LLC, Forrest Lammiman handles commercial restructuring, bankruptcies, and Chapter 11 reorganizations for corporate debtors, banks and other creditors.

He has another way to say it.

“The problem is that the wolf is at the door.”

“As with everything else that’s happened in the economy over the last few years, the (business) sales have shrunk,” he says. “But the costs of running the business haven’t shrunk nearly as much as sales."

“As a result, the ability to pay down the loan goes down enormously. What you’ve got to do is convince a lender that the lender is going to have to take a hit.”

That’s the challenge: persuading lenders— typically banks—that they would be better off negotiating rather than suing the companies that have borrowed money.

Twenty years ago, Lammiman says he had an easier time working with lenders. Today, it’s not the same ball game.

“I think we have had a long period of robust economic times. It’s extremely difficult for creditors to get used to the fact that they may have to make some adjustments, and it’s actually in their selfinterest to do so—rather than spend a lot of money on fighting,” he says.

After spending the last 18 years as a partner in large firms in Chicago, Lammiman joined mid-sized Meltzer, Purtill & Stelle LLC last year to lead its bankruptcy and restructuring practice.

Brian Meltzer, the managing partner of Lammiman’s new firm, says Lammiman was the right fit with the firm’s middlemarket clientele.

Meltzer says Lammiman “comes up with some unique approaches to bankruptcy issues which are what we need because in the last few years—and the foreseeable future—much of our work involves representing companies that are in financial difficulties and need to seriously consider going into bankruptcy. Oftentimes, our client is fighting an uphill battle.”

“He always pushes for the client,” Meltzer says, “and the clients love him.”

A Scholar Becomes a Lawyer
Lammiman, 66, mainly represents Chicago-area and Wisconsin companies that are either creditors or debtors. His clients include banks, insurance companies, portfolio managers, private equity and other investment funds, creditors’ committees, litigation trusts, and bankruptcy estates in a broad range of restructuring and bankruptcy-related matters. He also represents corporate debtors in Chapter 11 cases and other restructurings.

A college professor turned lawyer, Lammiman has lived in three different time zones in the United States. You’d be hardpressed to find another attorney in town who can claim more collegiate affiliations.

Born in Rushville, Ind., Lammiman went to grade school in Oklahoma City. He moved with his parents to Seattle when he was 11.

With plans to become a professor of religious studies and philosophy, Lammiman attended Puget Sound Christian College in Seattle and also took classes at the University of Washington.

He then got a master’s degree in theology in 1969 from Vanderbilt University in Nashville. After that, he began a doctorate program in religious studies at Yale University in New Haven, Connecticut.

While working toward the doctorate, Lammiman taught part-time at Vassar College in Poughkeepsie, New York. He also earned money working for the Yale janitorial staff.

After receiving his Ph.D. from Yale in 1975, he taught for several years at Ohio Wesleyan University. In 1978, he went to teach at Buena Vista University in Storm Lake, Iowa. After three years of teaching in Iowa, Lammiman decided it was time to go to law school. The decision hit him after he spent a night preparing to teach a logic class about Venn diagrams.

“I was teaching all kinds of classes…and I was very busy and not making very much money and was well aware of it. And I was well aware of the fact that I wasn’t doing a very good job by my family,” Lammiman says.

“I finished preparing a lecture about Venn diagrams at about 10 p.m.” he says. “And I’m working way too hard…and I’m not living where I want to live. And I walked downstairs, and I told my wife, ‘I should go to law school.’ And she said, ‘Yes, please do.’”

In 1983, Lammiman graduated with high honors from the University of Iowa College of Law. He became a first-year lawyer at age 39.

Lammiman started his legal career at the Milwaukee office of Foley & Lardner LLP. He joined the firm with plans of working as a commercial litigator.

“But I showed up, and they directed me to the head of the corporate group,” Lammiman says. “And he welcomed me to the corporate group, and he thought he had interviewed me the past fall. And I had never met him.”

Though he wasn’t happy with the surprise assignment, Lammiman went ahead representing banks and borrowers in secured lending. He also handled other corporate matters.

The experience proved to be useful when a corporate partner at the firm suggested that he could find a niche working in bankruptcy. The Bankruptcy Code of 1978 was still a mystery to most corporate lawyers at the time.

After three years at Foley & Lardner, Lammiman moved to a smaller firm and joined a bankruptcy boutique in Milwaukee in 1986. Not only did he find himself in court more often, but Lammiman also got a lesson about the financial side of practicing law.

“People talked openly about money…so you saw what you needed to do to be productive in terms of bringing in your own business,” he says.

Lammiman learned at the boutique to be responsible for collecting fees from clients. “You had to sort through the clients in tough economic times and find out which ones were going to deal fairly with you, and you dealt fairly with them.”

“Coming from my background, dealing realistically with money was not a skill I had been taught in religious studies. That was really a very helpful school of practical knocks of learning how to deal with commercial reality better. And I think it has served me well over the years,” Lammiman says.

He left the boutique firm in 1991 and joined the law firm formerly known as Lord, Bissell & Brook. He stayed with the firm for 17 years, where he spent the last seven years as head of the bankruptcy practice group.

In 2008, Lammiman moved to DLA Piper US LLP, the largest law firm in the world. But his stay was short.

“I really needed, in this bankruptcy environment, to be back more with middlemarket clients. In this market, it became pretty clear to me that we were not going to have the run of national cases that we had in the Chicago bankruptcy court back in 2001 through 2004 or so,” Lammiman says, referring to bankruptcy cases that included big names such as United Airlines, K-Mart and Conseco Inc.

The middle market involves companies with assets that range from a few million dollars to hundreds of millions of dollars. Most of the cases Lammiman handles involve $20 million to more than $100 million.

The Middle Market’s Needs
Wanting to get back to those (relatively speaking) smaller cases, Lammiman started thinking about joining Meltzer, Purtill & Stelle.

He had met attorneys there when he was the head of the bankruptcy practice group at Lord, Bissell & Brook. Meltzer, Purtill & Stelle didn’t have a bankruptcy practice group at the time, but firm leadership realized that the firm could serve clients by hiring more bankruptcy lawyers. That’s because it had represented many real estate developers whose projects had failed.

“By 2008 and early 2009, all of our homebuilder clients and the commercial developers were running into trouble with their projects, and many of them couldn’t repay their loans,” says Meltzer, the aforementioned managing partner of the firm.
But clients don’t necessarily get excited about bankruptcy.

“It’s a very scary option, and a lot of our clients didn’t want to consider bankruptcy because of the stigma involved. They felt that filing would be an admission of failure,” Meltzer says

“As time went on, bankruptcy came to be viewed less as a potential stigma and more as an opportunity to get back on their feet. We were looking around for somebody who could join our firm and help us help these clients,” Meltzer says. “And (Lammiman’s) just the guy. He’s the right guy.”

Lammiman started at the firm in May 2009. “This firm is really one of the very best mid-sized firms in town,” Lammiman says. “It has a very good client list and a good history. Almost everyone here who’s among the more senior people started out at one of the larger firms in town.” At the firm, Lammiman says he is able to offer flexible billing rates without being cheap.

“I like the action. The problems are interesting. The people are interesting. There’s always drama to it. Every case that becomes a real case, problems emerge that you hadn’t even expected when you got started,” he says.

“And if you can make something good happen out of the situation for your client— maybe through negotiation or conflict that leads to negotiation—it’s a very satisfying thing.

“A wise bankruptcy judge said that ‘Chapter 11 is made for consensus and compromise.’ It doesn’t always work that way of course. But when it works out for the best, people measure their interest and measure other people’s interest and see if there’s some middle road that can be forged,” he says.

The challenges on the job come when a client is facing a substantial debt because of the economic climate.

“The worst thing is when…it’s very difficult to get them the result they want. That’s the most challenging thing because these are not easy cases in the middle market, particularly in an environment that has turned negative from an economic standpoint over the last couple of years,” he says.

“I think it’s challenging to get the megalenders to be realistic about what the economic results are likely to be and to find a reasonable way out of it that’s the best for the major parties as a whole. That’s what I like to do. Other times, you’ve got to fight,” he says.

Lammiman’s cases may involve family-owned businesses that have existed for three generations. And the companies can be “in dire straights,” he says.

These days, many clients are real estate developers. In one case, a developer filed for Chapter 11 bankruptcy on a 280-unit, $100 million condominium tower in Milwaukee that looks over Lake Michigan.

“And they would have been fine if the market hadn’t changed. They were the last luxury condominium building on line there in Milwaukee before the fall of 2008,” Lammiman says.

“They built the building. They just hadn’t sold the units. Now they’re still selling some, but most are going to be leased. We think that the project will be sold in the bankruptcy court to a buyer who will buy it for substantially less than the cost of construction. We’re working with the bank to try to get the best result for the debtor and its creditors,” Lammiman says.

The firm also represents numerous Chicago-area and regional banks. It doesn’t represent the handful of national megabanks because representing them creates conflicts of interest that far too often would preclude the firm from representing corporate debtors. Consequently, the firm gets referrals from law firms that do represent those largest banks.

In his spare time, Lammiman likes to travel with his wife, Barbara. A recent vacation included trips to Paris, Amsterdam and Brussels. He played basketball for his college team, and in numerous leagues and pick-up games for decades after that. He says it’s not worth the effort anymore.

“Hip replacement was the end of that,” he says. These days, Lammiman gets exercise by lifting weights and hitting the aerobic machines at the East Bank Club and by walking his golden retriever in Lincoln Park.

His professional memberships include the American Bar Association’s Business Law and Litigation sections, the American Bankruptcy Institute, the Turnaround Management Association and the Vanderbilt Divinity School board of visitors.

He also served on the board of directors of the American Board of Certification—the national certification board for bankruptcy attorneys—from 1992 to 2003.

Handling a High-Profile Case
If there’s a corporate restructuring issue, Lammiman has probably worked on it.

Among those he has represented: secured creditors in enforcing their rights against debtors and other creditors in Chapter 11 cases and other proceedings; secured creditors in disputes with other lenders regarding subordination agreements; reinsurance and insurance companies defending claims brought by state insurance insolvency receivers; landlords and other creditors enforcing their rights against debtors; creditors and debtors in litigating avoidance actions and other bankruptcy-related lawsuits; sellers and buyers of assets under Section 363 of the Bankruptcy Code; and corporate debtors in preparing for and engaging in restructuring, whether it’s Chapter 11 or an out-of-court proceeding.
In perhaps the most volatile high-profile case that Lammiman has handled, a life insurance company had invested $70 million in a Milwaukee manufacturer that had declared bankruptcy in 1994.

The case involved Bucyrus International, one of the world’s largest manufacturers of large mining equipment. The national business and legal press covered the case extensively.

During the Chapter 11 case, the New York law firm representing the company failed to disclose a significant conflict of interest. The conflict wasn’t discovered until after the bankruptcy concluded.

The Milwaukee law firm that had represented the insurance company in the bankruptcy wanted somebody who hadn’t worked on the case to prosecute the New York law firm.

Lammiman was first hired by Bucyrus, and later also by the life insurance company which had become the main shareholder in the company. Lammiman recovered $1.9 million in legal fees from the New York firm in the bankruptcy court. A state court malpractice lawsuit seeking $300 million in damages against the New York firm ended in a successful confidential settlement.

An attorney at the Milwaukee law firm that was initially involved in the case says Lammiman was hired because he’s a “real bright, very academic” attorney.

“The case had a lot of intellectual twists and turns to it, and Forrest also is a good litigator,” says Daryl Diesing of Whyte Hirschboeck Dudek S.C. “He’s not afraid to take on difficult opponents, so we just thought he was the right mix of somebody we could work with.”

“He’s not a shrinking violet in the face of serious opponents,” Diesing says. “And we needed somebody that could push.” In addition to being a good lawyer, Lammiman knows how to be civil with other lawyers, Diesing says.

“He’s not a personality that was just going to throw hand grenades and infuriate everybody just for the sake of it,” Diesing says. “He was going to be decent about it. We needed that level of personality, and he also knew the Milwaukee judges involved.”

“So we needed the combination of somebody that thought well, wrote well, was a good advocate—as well as somebody who was not a crazy, throw-mud-at-the-wall-type person,” Diesing says.

His ability to handle difficult issues also earned Lammiman praise from Meltzer.

“He’s been great,” Meltzer says about Lammiman. “He’s a very creative bankruptcy lawyer. Bankruptcy to me is very confusing and counterintuitive sometimes; you just don’t understand the logic of the rules and how they work. And he’s able to put a different twist on interpretations.”

Lammiman looks forward to the challenge created by the current economic downturn, stating, “We will have some wonderful opportunities to help clients through these difficult economic times over the next several years.”

This article originally appeared in Leading Lawyers Magazine—Business Edition for 2010 and has been reprinted with permission. © 2010 Law Bulletin Publishing Co.