Trustee reaches for the brass ring

March 24, 1996|By Alec Matthew Klein | Alec Matthew Klein,SUN STAFF

Until 10: 50 a.m. on the first of March, Deborah Hunt Devan was defined by the steady accumulation of personal history: a bankruptcy attorney of 21 years, a 46-year-old mother of three, a wife of an attorney, a daughter of an engineer, a Baltimore woman of middle-class origins who had put herself through school and garnered success, respect and $225 per hour.

But then she picked up her car phone in her navy blue Audi.

"I have a matter I'd like to discuss with you, and it's a sensitive matter," said the voice on the other end of the line Assistant U.S. Trustee Karen Moore, a Justice Department attorney assigned to the bankruptcy case of Merry-Go-Round Enterprises Inc.

In the next moment, Ms. Moore offered Ms. Devan a rare professional opportunity, or, should things go wrong, a monumental headache: to serve as interim trustee of Merry-Go-Round, an all-consuming position that would effectively make her chief executive of the ill-fated retailer and put her in charge of one of the nation's largest Chapter 7 liquidation cases.

"I'd love to do it," Ms. Devan replied.

"Are you ready to do it?" Ms. Moore asked.

There was history here: The Joppa-based fashion retailer had chewed up four chief executives in two years, drained tens of millions of dollars and lost any chance to recapture the luster that had once made it the apparel king for teen-agers.

Yet for Ms. Devan, there was no hesitation. "I felt like I'd worked hard for years to get a dream case like this, fraught with legal issues and hard work," she said. "It's an opportunity to take a situation that's troubled and straighten it out."

She noted, however, "The next thing you know, the world had changed."

Never before has she run a company nor has she ever been cast as the lead in such a large bankruptcy case, although Ms. Devan has done this sort of work for a living, even playing a role in the bankruptcy of Jim and Tammy Faye Bakker's PTL ministry.

But the Merry-Go-Round tableau is different. Nothing could have foreshadowed the task before her, except perhaps for an inscription under her 1968 Towson High School yearbook picture: " a career in fashion."

Those were the hopeful words of a girl who had designed clothes for her Barbie doll and aspired to become a department store manager, or fashion designer not an attorney spangled in a Phi Beta Kappa key, professional memberships and, on a recent day, a Saks Fifth Avenue suit, Perry Ellis scarf, antique pin and Nordstrom shoes.

"Who would have thought my entree into fashion would have happened in such a fashion?" Ms. Devan said.

Unlikely as it was, peers in the profession are convinced that Ms. Devan is suited for the job. Indeed, she was hand-picked from a panel by the U.S. trustee's office. An honors graduate of the University of Maryland School of Law. Vice president of the Bankruptcy Bar Association of Maryland. Member of the Business Bankruptcy Committee of the American Bar Association. Former adviser to the White House National Economic Council. And on.

"She's one of the top bankruptcy lawyers in the city," said Roger K. Garfink, an attorney who has worked with Ms. Devan for 20 years. "She's very knowledgeable and very smart and tough, and she's very determined. I think she's regarded as a formidable opponent."

That much has already been established. On her 11th day on the job, Ms. Devan asserted in U.S. Bankruptcy Court that former Chief Executive Officer Richard P. Crystal had mismanaged the business in its final days, costing the retailer millions of dollars by making unrealistic projections, failing to prepare for a liquidation and leaving the company in disarray.

In attendance, Mr. Crystal kept silent, shaking his head in disgust. But others, including former Merry-Go-Round employees who felt betrayed by the former CEO, found hope that Ms. Devan was taking an uncompromising look at what had gone wrong at the once-proud company of nearly 1,500 stores and 14,000 employees.

"I'd like to send her a dozen roses I'd like to send her two dozen roses," said Mike Hopkins, a former Merry-Go-Round computer operator. "As far as Crystal goes, we saw him do nothing, absolutely nothing."

Mr. Crystal was supposed to be the merchant who would resuscitate the retailer. But now, there are no more fashion decisions to make. Ms. Devan is supposed to be the liquidator who will squeeze the most out of the company's assets to pay back creditors.

"My job is to close the door and turn out the lights," she said.

Not that the task is any easier.

At about 8: 20 p.m. that Friday night, after her appointment as interim trustee, an entourage of Merry-Go-Round landlords, liquidators and creditors convened a conference call with Ms. Devan, who sat at home in jeans and a sweat shirt armed with a Dictaphone and a stack of legal pads to go over pressing issues, like running a business that still employed more than 1,000 and operated 435 stores across the country.

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