Lazard Ltd., shaking up one of Wall Street’s biggest restructuring practices, picked David Kurtz to be global head of the unit, taking over for the group’s co-founders, Barry Ridings and Frank “Terry” Savage.
Kurtz, 57, who has worked at the firm since 2002, will still be based in Lazard’s Chicago office, he said in a telephone interview. Ridings and Savage will assume new roles expanding the company’s practice overseas, said Antonio Weiss, Lazard’s global head of investment banking.
Lazard managing director Andrew Yearley, 44, will oversee the North American restructuring practice. London-based managing directors Richard Stables, 47, and Laurent Rossetti, 41, will oversee the restructuring group in Europe, the Middle East and Africa.
“These changes will promote the next generation of leadership in the group and free up Barry and Terry to pursue the business we see developing in the marketplace globally,” Weiss said. “Restructuring is an important practice for Lazard, and we anticipate increasing levels of activity internationally, particularly in Europe.”
Lazard advised on the bankruptcy of Lehman Brothers Holdings Inc. and is working with Greece on restructuring its debt. Ridings, 59, and Savage, 64, will remain vice chairmen of Lazard’s investment bank and focus on expanding the firm’s restructuring and debt-advisory practice outside North America.
Another Lazard managing director in the restructuring group, Daniel Aronson, will focus on expanding the firm’s investment-banking practice in Chicago.
Evercore Partners Inc., the advisory firm that competes with Lazard and other investment banks to advise large corporations, creditors and unions on bankruptcies and turnarounds, sought in December to hire Kurtz to run its restructuring group, said four people familiar with the matter.
Evercore co-founder Roger Altman personally recruited Kurtz to join his firm and has been searching for a senior restructuring banker to help run the practice, the people said. Carina Davidson, a spokeswoman for Evercore, declined to comment on talks with Kurtz. Altman didn’t return a message seeking comment.
Kurtz, a former bankruptcy lawyer at Skadden, Arps, Slate, Meagher & Flom LLP, has overseen restructurings including those of Tribune Co. and Dynegy Inc.
“It’s been gratifying to watch the development of the group,” Kurtz said. “Our competition tends to consist of one or two senior bankers, but we have a bench that is unrivaled.”
William Repko, a co-founder of Evercore’s restructuring group, moved to a senior advisory role at the end of 2011. Last year, Evercore sought to hire Jim Millstein, a former Lazard banker who previously was the U.S. Treasury Department’s chief restructuring officer, one of the people said. Millstein declined, and later formed his own restructuring company.
David Ying, who co-founded Evercore’s restructuring group with Repko, advised on MF Global Holdings Ltd., which filed last year the eighth-largest bankruptcy in U.S. history. Kurtz would have co-run restructuring with Ying, one person familiar with the matter said.
Advisory firms are preparing for a jump in restructurings amid concern that Europe’s debt crisis will curb investor appetite for risky securities and limit options for companies seeking to refinance. Moody’s Investors Service predicted the global default rate on high-yield debt may climb to 2.4 percent by November from a projected 1.7 percent at the end of 2011.
Under Ridings and Savage, who started the restructuring practice in 1999 after leaving Deutsche Banc Alex. Brown, Lazard has built a one of the largest restructuring groups on Wall Street with more than 100 professionals. When General Motors and Chrysler LLC filed for bankruptcy in 2009, Lazard advised the United Auto Workers union in talks with the automakers and Treasury.
Lazard advised on some of the largest bankruptcies of 2011, including the filings of Dynegy Holdings LLC, NewPage Corp and American Airlines’ pilots union during the carrier’s bankruptcy.
Lazard vies for millions of dollars in advisory fees with firms such as Evercore, Rothschild, Blackstone Group LP, Houlihan Lokey and Moelis & Co. It has been paid $30.3 million for its work on the Lehman bankruptcy through November, according to legal filings. The group is advising Eastman Kodak Co. on a potential debt restructuring or bankruptcy, people familiar with the matter said in October.
Lazard also is advising the Treasury on Ally Financial Inc., the lender that received a $17.2 billion taxpayer bailout. Centerview Partners LLP, another advisory firm that’s working with Ally’s money-losing mortgage unit Residential Capital LLC, hired two former managing directors from Miller Buckfire & Co. for its turnaround group earlier this month.