Kirkland & Ellis gained a major adversary in its competition for the most complex — and profitable — debt restructurings after the departure of a st...
TL;DR
Kirkland & Ellis faces increased competition in debt restructuring after star partner David Nemecek left for Simpson Thacher, following a controversial antitrust lawsuit that may reshape creditor cooperation agreements.
Kirkland & Ellis gained a major adversary in its competition for the most complex — and profitable — debt restructurings after the departure of a star partner
Kirkland & Ellis Faces New Competition in Debt Restructuring Arena Following Star Partner’s Exit
Kirkland & Ellis LLP’s departure of senior partner David Nemecek has intensified competition in the high-stakes world of corporate debt restructuring. Nemecek, a 15-year Kirkland veteran known for pioneering aggressive out-of-court debt strategies, joined Simpson Thacher & Bartlett LLP earlier this month, signaling a shift in the legal landscape for complex capital structure solutions.
Nemecek’s exit followed a contentious antitrust lawsuit filed by Optimum Communications Inc.—a former Kirkland client—against major lenders, including private equity firms Apollo Capital Management and BlackRock Financial Management. Optimum alleged that a “cooperation agreement” among creditors constituted an illegal cartel, a claim aligned with Nemecek’s prior warnings about the legal risks of such arrangements. Kirkland distanced itself from the case, dropping Optimum as a client to "dissociate from the lawsuit", a move seen as appeasing other clients named in the litigation.
Nemecek’s strategies, which often prioritized private equity-backed debtors by sidelining legacy creditors, became a hallmark of his career. He advised on restructurings for companies like Macy’s Inc., PetSmart LLC, and Saks Global Enterprises, though not all outcomes were successful— Saks later filed for Chapter 11 bankruptcy. His departure raises questions about whether Kirkland will continue to pursue similarly aggressive tactics, which have drawn scrutiny from both competitors and regulators.
Simpson Thacher’s recruitment of Nemecek positions the firm as a direct rival in handling large-scale debt restructurings, a lucrative niche where Kirkland has long dominated. Alden Millard, chair of Simpson’s executive committee, described Nemecek’s hire as a “rare opportunity” to bolster the firm’s capital structure solutions practice.
The Optimum lawsuit, if successful, could reshape the legal framework governing creditor cooperation agreements, potentially limiting the tools available to lawyers like Nemecek. For now, his move underscores the growing tensions between law firms representing private equity sponsors and the creditors they often clash with in restructuring battles.
Kirkland and Nemecek declined to comment on the matter.
