Michael M. Parker is a partner with Norton Rose Fulbright in San Antonio and Austin, Texas. For 25 years, he has focused his practice on bankruptcy and insolvency-related litigation and workouts in a broad range of industries. Parker has considerable experience representing large and small buyers of distressed assets in U.S. Bankruptcy Court and federal District Court.
He has represented secured and unsecured creditors, debtors, trustees, real estate developers, intellectual property holders, individuals, groups, corporations, REITs and private funds in complicated bankruptcy cases and complex commercial litigation related to distressed situations, and buyers, sellers, banks and others in bankruptcy sales and negotiations of plans of reorganization.
Parker is also a founder and a former president of the Central Texas TMA Chapter.
Q: How did you gravitate into turnaround and restructuring work, or did you start out headed that way?
Parker: I had no idea I was going to get into turnaround and restructuring work. I had no idea I was going to be a lawyer. I started out as an engineer. My undergraduate degree is in civil engineering from the University of Colorado at Boulder. I got a master’s in engineering at the University of Texas. Then I worked for a couple of years in Dallas.
The Dallas job was at Beltway Construction Company. They weren’t my most lucrative offer, but they promised to immediately give me lots of responsibility, which they did. Initially I was project engineer on a couple of projects, and then when they terminated the project manager, I became project manager and built a wing addition to a high school and an elementary school, Charles Rice Elementary School and Sunset High School, for Dallas Independent School District.
When I was finishing those up, I was slated to go to Atlanta to build a tiltwall manufacturing facility for Coke. I would have spent another year and a half or two years in Atlanta on that project, and then I was slated after that to go to China to build a toner plant for Xerox.
For the first time in my life, I looked five, 10 years down the road and saw myself hopping from place to place for the rest of my life and thought, “I can’t live like that.” I’d already taken the GRE. I took the GMAT and the LSAT and started talking to a lot of people about what I should do or what I might enjoy otherwise.
I ended up in law school because most of the advice I got was that with law school, you had lots of options. Even if you didn’t want to practice law, you could do lots of things with a law degree. Professor David Ashley from my master’s program was trying to recruit me to come to Berkeley at the time. He wanted me to come out there and pursue a PhD and teach. I thought really seriously about that, but I thought at the same time, “What if I don’t like it?” There’s really not a lot of other things you can do or options you have with that background.
So law school seemed like the best option at the time. I ended up doing a joint JD/MBA. I signed up for the MBA program, again, to hedge my bets on where I was going and what I was doing because I wasn’t sure. During law school I worked both as kind of a construction expert and law clerk for a firm in Austin. My thought was I might do construction law.
Then in my second year I took a secured credit class with Jay Westbrook, who is a hero of mine—just a brilliant teacher. Westbrook made secured credit understandable like my physics professor in my first year of engineering school made physics understandable. All of these concepts that I kind of understood, maybe understood, all of a sudden became clear. I had an epiphany.
I had that same epiphany in secured credit, liked it, and ended up taking the bankruptcy course, and I just fell in love with the topic. It was intellectually stimulating. When I was getting out of law school, I had the honor of clerking for Bankruptcy Judge Ronald B. King here in San Antonio. It was one of the best jobs I’ve ever had. He’s now the chief judge (Western District of Texas). I spent two years with Judge King, and I was hooked.
Q: If you could start your career over, would you do anything differently?
Parker: I don’t think so. Maybe I could have spent more time doing the bankruptcy/reorganization work I love had I not been an engineer first, but I loved that aspect of my life. I loved the work. I have told my children several times that I serve as the poster child for changing your mind. I don’t regret anything I’ve done career-wise.
At 18 years old, I had no idea what I wanted to do really. I picked engineering. The sole advice my father gave me was, “You’re good at math, and you’re good at science. Why don’t you try engineering?” I didn’t know any engineers. I’d never done anything like that before. I just picked that thinking maybe I’ll like it. And I did.
I agree there are some exceptions to that rule, but most 18-year-olds don’t know enough about the world to know what it is they’re interested in. My advice has always been to aim at something. You can’t wander aimlessly about waiting to figure out what you want to do. Aim at something, and if you change your mind, you change your mind. We’ll sort it out then.
I’ve got, in fact, a couple of kids who have changed their minds. My oldest, Joshua, is a brilliant engineer. He went the same route as I did—civil engineering as an undergraduate and was going to a graduate school in structural engineering at the University of Texas. After his first semester, he came home and we had several long walks and talks where I came to realize that he was not asking me what he should do but was telling me what he was going to do. He dropped out of graduate school and entered seminary down in South America. He picked up Spanish in 2016, is now fluent, and is in Paraguay. He’s going to finish up his novitiate this year, and then he’ll enter full seminary in Santiago, Chile, in 2019.
My number two child is in Houston. Gabrielle graduated last year summa cum laude from Rice University with majors in East Asian studies and English with a minor in business to satisfy her dad. She’s working as an archivist at the Rice University Library right now. She’s thinking graduate school, maybe law school, but is trying to figure out exactly where to go with that.
Number three is at Texas A&M. Siobhan started out wanting to be a vet, moved to environmental consultant, and now we’re talking nursing here in her senior year. It’s going to cost her a little more time, but she’s feeling much more comfortable with where she is each time she moves around.
Q: What are you passionate about outside the office?
Parker: Hands down, my kids. I have five, one left at home. Camille, my number four child, hasn’t had enough time to change her mind, and I don’t know that she will. She’s my artist. She’s a freshman at SCAD—Savannah College of Art and Design—and loves it there. Number five, Zachary, is a junior in high school. Like his brother, he is engineering inclined.
I’m also passionate about soccer. I coached all my kids in soccer. I even worked with two other coaches in 2006 to form a competitive soccer club—SA Fusion FC—which had eight teams at its peak but has now disbanded.
When Zachary stopped playing soccer, I stopped coaching after 20 years. I moved into refereeing to make sure he could find an alternative because he liked soccer. Refereeing kept him involved in soccer, earned him some money, and provided good leadership training. The skills necessary to be a good referee translate into many other areas of life, as I learned when training his older brother and sister to be referees.
Q: Did you get involved in soccer because of your kids, or were you a big soccer fan before that?
Parker: I’ve been a fan since I was a child. I have three brothers, and my parents had married very young. They couldn’t afford (American) football equipment, so they signed my brothers and I up for soccer. We all played competitively. In fact, I was on what I’ll call the B Olympic team in Colorado—but don’t make that out to be more than it was. The Olympic soccer team trained in Colorado Springs, and when they wanted to scrimmage, they’d call in local players from Colorado—the B soccer team essentially. We were essentially sparring partners for the real team.
I played on competitive traveling teams through high school. I also played on the club team at the University of Colorado but dropped out after the first year, primarily because I couldn’t handle both the rigorous classes and the soccer schedule, and I wasn’t going to school for the soccer.
Michael Parker (right) and his son Zachary are involved with youth soccer and referee games on weekends.
Q: What have been some of your favorite or most gratifying cases in your legal career?
Parker: I’ve participated in some very large, complex, and intellectually challenging cases, but one of my most rewarding cases is the first pro bono matter I took on shortly after clerking for Judge King. I received a call from Volunteer Legal Services (VLS) in Austin, who asked if I would consider taking on a pro bono Chapter 12 case. I had only seen a couple of Chapter 12 cases filed when I clerked for Judge King, and I knew there were probably only a handful of lawyers in Austin who had ever filed one. I was intrigued and had been looking for a good pro bono project. I accepted, and they provided me my client contact, a Polish couple who owned a small farm.
I called and learned from the wife that her husband refused to talk to me and refused to file bankruptcy. He also refused to release any information. I had naively assumed my new clients would be cooperative and appreciative. The wife knew they were in trouble and had approached VLS on her own, but her husband was too proud to admit there was a problem.
From the wife, I learned that her husband’s father, grandfather, and great grandfather had all been farmers. Her husband had borrowed money from the same rural agricultural bank all his life and purchased feed and equipment from the same people he grew up and went to church with. His word was his bond, and he would never be able to bring himself to tell his banker, creditors, or neighbors that he would not be able to pay them back.
I knew what to do. I asked the wife to tell him that I didn’t know if a bankruptcy was even necessary without gathering more information. But even if it was, it wouldn’t prohibit him from paying back his banker, seed supplier, vet, or his neighbors. He could still tell these people—his friends and community—that he intended to repay them. All bankruptcy would do was eliminate his legal obligation to pay them back; it wouldn’t prohibit him from trying. That did the trick. They agreed to meet.
Reviewing the couple’s financial information, I immediately realized they were in dire financial straits, would not survive a Chapter 12 bankruptcy case, and needed to file a Chapter 7 case. I learned that the wife was concerned that her husband’s medical condition—he needed quintuple bypass surgery— would torpedo their already poor finances and leave them on the streets. In addition, the husband liked farming, but his raison d’etre was his cattle. They literally just wanted to save the farm.
The community bank had been abusing them for years by annually seeking to collateralize their loan with everything the couple owned, even exempt property. I prepared a bankruptcy petition and drafted a complaint against the bank, challenging its liens and seeking to void or subordinate them under several legal theories. I wrote to the bank, attached a copy of the unfiled complaint, and offered to talk. Texas has generous property exemptions, especially for farmers, and I made that clear in my letter.
Negotiations began and resulted in the couple getting to keep their homestead (mortgage extinguished), 30 acres of farm and ranch land, six head of cattle, and necessary farm and ranch equipment. They agreed to liquidate the rest to pay down the bank debt. It wouldn’t pay off the balance due, but we would both avoid an ugly fight. Moreover, I knew the couple would pay the bank back if they were ever able to come up with the money, which was highly unlikely.
For years after that, I received homemade cookies every Christmas. The couple restored my faith in mankind and the goodness of people. I have been taking pro bono cases ever since.
In another unique case, I represented a well-regarded regional law firm, the Kleberg Law Firm, in their bankruptcy case in Corpus Christi. The firm suffered significant partner defections in San Antonio and Houston, which left the firm with costly, long-term lease obligations in both cities. The firm tried negotiating with the landlords to avoid a filing, but the landlords were uncooperative and didn’t believe the firm would file bankruptcy. After exploring all other alternatives, we filed the case in Corpus Christi.
Dealing with lawyers and a law firm as clients was a completely new experience for me. It taught me a lot about both how law firms operate and are successfully run and wound down, how important client confidentiality and choice are, and how quickly law firms can disintegrate based on the actions of a few.
After confirming a plan of liquidation with a liquidating trustee, we ended up having to sue—with fair warning—the very same lawyers who hired us to coerce all the lawyers to return preferential payments received while the firm was descending into bankruptcy. We paid off the bank and all the creditors, even the landlords’ capped claims, and wound down the business. But there was a fight over the disparate distribution of the remaining equity among partners involving those who took some equity out and those that had not taken enough equity out. To resolve the dispute, I ended up having to sue them all. We ended up resolving all of those lawsuits in mediation, and I can report that many of those folks are still my friends.
Q: If you can pull that off, you must be doing something right.
Parker: I warned them what would have to happen, so no one was surprised. We tried to resolve it all outside of court, but we couldn’t get the unanimous consent we needed to move forward.
Q: What role has your TMA membership played in your career?
Parker: The great thing about TMA is that I see almost everyone involved in TMA in a lot of my cases and have been able to refer things to members and have gotten referrals from members because of my TMA relationships.
Q: You go back a long way with TMA.
Parker: I started the Central Texas Chapter in 2000. I had been looking at TMA and contemplating membership either in Houston or Dallas. Jim Matthews with the Dallas Chapter was the one who planted the seed. He said, “You ought to just start your own chapter. You can’t travel to Dallas or Houston all the time and get the regular benefits of membership.”
So I got together with an accountant, Bill Romney; a turnaround manager, Dan Hair; and a banker, Sharon Miller, and we put together our contact lists. We sent out a lot of invitations to folks in San Antonio and Austin saying we were contemplating trying to put together a TMA chapter, but we needed at least 50 people. Would you be interested? We had formation meetings in each city and got more than enough people interested in the chapter.
As you may recall, I was president near-forever, not entirely by choice. I was the initial president because it was my brainchild and I’d put everything together, so they wanted me to be president. I was slated to be replaced after two years by Bill Romney, who was with Arthur Andersen at the time. You remember what happened to Arthur Andersen in the early 2000s? Bill got caught up in the Enron mess and the offshoot of what happened to Arthur Andersen. Bill came to me and said, “No más. I can’t take over for you.”
So Bill appropriately withdrew, and I stayed on for another couple of years. Then Sharon was supposed to replace me, but she got a promotion and transferred to the Minneapolis office of Wells Fargo, so she also appropriately withdrew. So I stayed on another couple of years. My next replacement, Dan Hair, was with Tatum CFO. Then Dan got an overseas assignment in Europe for two years. So all of my exit plans failed. Eventually I was able to find a suitable replacement, but it took a while.
Q: What advice would you have for someone who was new to the industry or was thinking about getting into the industry?
Parker: Don’t obsess over the decreasing number of Chapter 11 bankruptcy filings. People talk about a down cycle for the turnaround industry, but the truth of the matter is the reorganization industry will always be around. It’s like death and taxes, it’s one of those things that are always going to be necessary. There will always be a need for people with skillsets that allow them to reorganize companies.
The second piece of advice is get out there and network in organizations like TMA because a lot of your business, a lot of your referrals, a lot of your connections are going to be important to you in the future in any number of ways. On a daily basis, I see and work with people who are in organizations that I’m connected to, including TMA. Those relationships make the business of reorganizations, or the business of what I do, so much easier than coldly coming into a case and not knowing any of the players, not knowing any of the possibilities or options or idiosyncrasies of the way things may go in a given jurisdiction.