The $1.6 billion client RTC is no more: The Resolution Trust Corp. closed down last month. Many law firms were well rewarded for helping it mop up after the savings and loan debacle.

January 22, 1996|By Mark Hyman | Mark Hyman,SUN STAFF

Field offices, in places like Tampa, Kansas City and Atlanta, are shuttered. Thousands of federal workers have been let go or shifted to other government posts.

Still, memories of the Resolution Trust Corp. linger. And nowhere are they stronger than in thousands of law firms across the country.

Before it closed shop Dec. 31, the RTC led the federal government's massive mop-up efforts of the savings and loan debacle, taking over more than 700 failing thrifts and selling off assets totaling about $394 billion.

But some enterprising lawyers saw something else in the RTC: a mammoth client able to keep an aggressive firm swamped with legal work for months, even years.

From 1989 until last year, RTC paid $1.6 billion to lawyers who represented the agency in a wide range of matters, from foreclosures to auction sales to professional liability cases.

Some of that work found its way to Baltimore.

"It was great. And it happened at the right time," said Arvin Rosen, a partner at Siskind, Grady, Rosen & Hoover, a boutique firm that handles real estate matters.

"With the problems that savings and loans were having at the national level, real estate [transactions] as we knew them just weren't there. Workouts and resolution of assets -- the work we did for the RTC -- is what was happening in the marketplace."

Leslie Ries had a busy real estate practice before she began handling matters for the RTC in 1991.

But the RTC work moved that to the next level.

"It has been exciting to learn about financial institutions from the inside, basically serving as house counsel for the bank. It's different from representing a ma-and-pa type client, which I do. Most attorneys don't get that kind of practice," said Ms. Ries, a partner at the Baltimore firm of Rosenberg, Proutt, Funk & Greenberg.

In Maryland, Mr. Rosen and Ms. Ries, and their respective law firms, were among the big winners in attracting RTC legal work.

Between 1992 and last year, Mr. Rosen's firm handled 713 individual matters for the RTC, collecting fees and expenses of $1.7 million, according to an RTC official.

Ms. Ries' firm handled 295 matters during the same period, according to the RTC, with fees and expenses of about $738,000.

Though substantial, those fees do not approach the dollars earned by law firms nationally doing work for the RTC.

Morrison and Hecker, a law firm with offices in Kansas City, Mo., and Washington, topped the list of attorneys attracting RTC business, with fees and expenses of $54 million.

That work isn't gone yet: the Federal Deposit Insurance Corp. has taken control of the RTC's remaining, unsold assets and is hiring lawyers like Ms. Ries and Mr. Rosen to dispose of them.

But the boom times clearly are over, and lawyers who have relied heavily on such work are looking elsewhere.

Mr. Rosen said his firm, and others, are equipped to deal with such changes.

"The practice of law is much different than 20 years ago. Firms today are very flexible in getting into different, evolving areas of law," he said. "You can't be that fixed in the nature of your practice."

But Mr. Rosen wasn't revealing much about his firm's strategy.

"We think we have found some very good niches in the marketplace," he said. "I prefer not to share those with your readers, not to mention my competitors."

Ms. Ries said her work for the RTC had given her skills that she can use to build her real estate practice.

"It's given me the ability to handle any kind of commercial venture, because we handled everything for the RTC, from routine foreclosures to sales of pools of loans -- such a broad gamut of things," she said.

Another lawyer, Richard Gray, is owner of Financial Conservators in Baltimore.

Mr. Gray's company has worked extensively with RTC, managing its properties and overseeing other assets.

When the RTC picked up a $2 million estate in the Virginia horse country, Financial Conservators kept watch on the property while it underwent a major rehabilitation.

In all, Mr. Gray estimated, the company has managed more than $1.5 billion in RTC assets.

Financial Conservators' contract with the former RTC recently was extended a year.

After that, Mr. Gray said, his company would seek more clients in the private sector -- banks, insurance companies -- which account for 30 percent of his firm's business now.

As for Ms. Ries, she admits she'll miss her association with the RTC. The work rarely was boring, she said.

"We had hotels, shopping centers, houses, apartments, every type of real estate -- Ms. Ries explained.

"It was like representing 40 banks -- most firms are fortunate if they represent one."

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