The Honorable Kevin Gross U.S. Bankruptcy Court Judge for the District of Delaware
The Honorable Kevin Gross U.S. Bankruptcy Court Judge for the District of Delaware

After serving the U.S. Bankruptcy Court for 14 years, The Honorable Kevin Gross is retiring. In a Q&A with ABF Journal, he looks back on the events that led him to bankruptcy and the most important cases that came before him. 

Q. Where did you attend law school and were you interested in bankruptcy as a student?

A. I attended the Washington College of Law of American University from which I graduated in 1977. Bankruptcy was not an area of particular interest because the code was not what it is today. I took a course called (as I recall) Creditors’ Rights. The course was taught by an elderly Virginian who in his day was a real powerhouse. But when I took the course, he had seen far better days. Several of us would go to his office with cigars and he would supply the bourbon. We would discuss the cases, and I received an “A” in the course but hopefully not because of the cigars.

Q. How did you move into bankruptcy?

A. Early in my career my choice of practice areas was corporate litigation. I was a law clerk for the Court of Chancery and went to work after the clerkship for a small but very reputable firm, Morris and Rosenthal. Then, in about 1991, I was in the office one Saturday and received a call from a lawyer at Sidley & Austin with whom I had done some work. He told me that Columbia Gas had just filed for bankruptcy and asked if I could get him copies of documents from the bankruptcy. I called someone I knew at Young Conaway Stargatt & Taylor, they got me a slew of documents, and I put them on the train to New York where someone from Sidley picked them up. On Monday, I took a number of lawyers from Sidley & Austin to the hotel for their interview, and that firm was chosen as counsel to the Creditors’ Committee. Much to my surprise, they asked me to serve as their local counsel. Had I known what the job entailed I would have told them to go to a larger firm. But I took the case, and it kept me busy for years. I would get several calls every day from lawyers at Sidley. One day an associate identified himself as “part of the Columbia Gas team at Sidley.” I told him he was speaking to the Columbia Gas team at my firm. It was a remarkable and complex case, and that is how I entered the world of bankruptcy — learning as I went along. Before the late 80s and 90s there actually was little bankruptcy. I had worked on one case, but there were very few bankruptcy lawyers in Delaware. It was Young Conaway and Judge Helen Balick who made bankruptcy in Delaware what it is today.

Q. At what point did you realize that you wanted to become a judge?

A. My clerkship at the Court of Chancery informed me that I would like someday to become a judge. A problem I had in practice was that I saw both sides of a case, which is difficult for an advocate. Yet I represented clients zealously but always a little unhappily. I was able to do a number of mediations and even a few arbitrations. When the court was going from two to six judges, I decided to apply. I told myself it was a real long shot, but I applied anyway. And here I am, about to complete my term. It is still a wonder to me.

Q. Looking back, what were some of the most interesting or important cases that came before you?

A. I could take page after page to answer this question because I tried to do my best work with every case that came before me, and I considered each case a most important case. But if I had to name a few cases, I would say Nortel, Los Angeles Dodgers, ABC Learning and Fisker. But again, I could name almost every case in this category of importance. Nortel was a difficult, complex, very interesting case because of its size and interrelationship with the Canadian court. We held almost a one-month trial in which the Canadian court and my court were connected by television. I saw the lawyers and witnesses in Canada and Judge Frank Newbould sitting in Canada saw my courtroom. The LA Dodgers case was a very public case in which the owner of the debtor — Dodgers — walked away with $2 billion from the sale of the team. ABC Learning was a difficult Chapter 15 case in which I was really tested. And Fisker I will write about shortly.

Q. Which of your rulings do you view as having the most impact on bankruptcy law? 

A. Here, I would have to answer the Fisker bankruptcy because it was, much to my surprise, maybe the most discussed decision I ever made. It dealt with credit bidding, and as a result of the auction, the debtor had a much better return because I capped the credit bid which made it possible for the winning bidder to compete at the auction. As a result of the case, I was speaking at a conference and heard myself referred to as a “maverick.” I am no maverick, I can assure you. Some lawyers and judges loved the decision, and others hated it, but it was a topic of conversation for some time.

Q. Overall, how have you seen the state of bankruptcy change since you’ve been on the bench?

A. The greatest change in my time (14 years) on the bench is that most of the cases we see now are sale cases. In the good “old” days, companies would come to a case intending to reorganize. It didn’t always work out, and sometimes a sale was necessary, but the goal was reorganization. But today, many debtors come to bankruptcy solely to sell. It makes for a much shorter case. The other important change is the involvement of hedge funds in most all bankruptcies. The various tranches of debt make it difficult to find a settlement basis.

Q. If there is anything you could go back and change, what would it be?

A. I have a few regrets. On several occasions I lost my temper or was too strident in a mediation. I just could not understand why a party and its lawyers were not cooperating to reach settlement. Unfortunately, I took their actions personally and, of course, it was not personal. But in a mediation, I have a client and that client is the settlement of the case. Settlement with a capital “S.” I very much wish I could go back and take a different stance. You lose your temper and you lose. And then there was one occasion in a hearing in which I thought (correctly) that I was being personally attacked by a lawyer, and I raised my voice and told the lawyer to sit down or I would have him sat down. What I wish I had done was either call a recess and left the courtroom or just listened and overruled the lawyer. But I didn’t, and I do wish I could go back and change the result. That episode was widely reported in the bankruptcy press, and I received many calls from friends, and even my sister who lives in New York and is not a lawyer called to see why her brother did what he did.

Q. What are you looking forward to doing after your retirement?

A. I am anxious to continue working on a somewhat more limited basis, but I know full well that 75% work quickly turns into a full-time position. I would like to associate with a law firm where I can mediate cases, perhaps serve as a director on a board or two, mentor younger lawyers and help the firm in any way that I can. But in the 25% less working time, I want to spend more time — and relaxed time — with my wife, children and dog. I also have taken up golf, and I hope to play myself out of embarrassment.

Q. Is there anything else you would like our readers to know?

A. Yes. First, my judicial colleagues have been just great to work with, and I will miss seeing them and talking with them often. Second, I have had a wonderful staff with whom I greatly enjoy working, and it will be difficult to say goodbye. Third, our clerk, Una O’Boyle, and her chief deputy, Stephen Grant, and the entire staff in the clerk’s office have been the force behind the court. Last, your readers should also know that I have greatly enjoyed my tenure because with but a very few exceptions the lawyers who have appeared before me have been outstanding and respectful advocates. They are true professionals, and I will miss them and their cases. The lawyers’ skill has truly been incredible and has made it both easier and harder for me to decide cases. Easier because the answer to the issue presented is there in their presentation and argument. Harder because both or multiple sides have done the same excellent work. •