Time to resume our series of open threads covering small (or smaller) law firms, focused on different practice areas. We’ve already written about small law firms in general, insurance law, personal injury law, trusts and estates, immigration, real estate, intellectual property, ERISA / employee benefits, and family law / divorce law. Some of these threads are still active (or could be resuscitated), so do check in on them.

Today we turn to the booming field of BANKRUPTCY. This practice area might seem depressing, given its focus on financial distress, but some people find it quite sexy.

A long time ago, the field was generally shunned by large firms, so that most firms doing bankruptcy were on the smaller side. But Biglaw embraced bankruptcy years ago, and it’s probably glad it did. The bankruptcy departments of large law firms are super-busy these days, providing a partial hedge to the weakness on the transactional side.

What about bankruptcy boutiques — how are they doing? Some material to kick off the discussion, after the jump.

Like most people, I’m having trouble focusing on my duties given the perils of Balloon Boy, Falcon Heene. According to my television, the balloon is down, there is no boy in it, and as of now we don’t know where the boy is. And the parents were on Wife Swap. Here’s a write-up of the episode the Heene family was featured on. Crazy story.

Of course, multitasking is an important life skill. It’s a skill that one law student hasn’t seemed to master, at least when attractive women are around. Here’s the Craigslist ode from a law student somewhere in the D.C. area to an apparently stunning vixen:

Morally Bankrupt - m4w

I saw you in my bankruptcy class. I was so distracted by you that I could barely pay attention to the riveting lecture about the history of bankruptcy law. I imagine that you are a creditor and I am a bankrupt and I will have to work off my debt for you or risk debtor’s prison. You can have whatever you want; no state law exemptions. I want you to declare bankruptcy all over me.

I am sick of ending my nights pro se. I promise if you entertain my claim that you will have a huge judgment entered in your favor over and over again. We can even violate the Model Rule of Professional Responsibility and engage in a 108(j).

My interests include hilarious law-based puns; and mocking others. If you think we are a match, let’s grab a drink after class. I know it’s a weeknight but my parents let me stay out as late as I want to as long as I call by 11pm to check in with them.

P.S. I am neither the ginger nor the weird guy next to you.

Beautiful bankruptcy babe — you know who you are — it looks like you have a not-so-secret admirer. Let us know if it works out.

Morally Bankrupt [Craigslist]

It’s been a long time since we checked in on the ruins of Heller Ehrman. It seems strange that it’s been over a year since Heller Ehrman announced that it was closing its doors.

Everybody that was going to land on their feet after Heller collapsed has presumably landed. Those who never did get a job back in Biglaw post-Heller have hopefully moved on to other lucrative and rewarding careers.

While most of Heller’s employees have moved on, it looks like some of Heller’s things are still looking for new owners. One tipster reports that you can purchase your own little piece of Heller if you want to:

FYI the art from the Heller Ehrman art collection is up for sale at Bonhams New York:

Sale 17421 - Contemporary and Modern Art

Let’s take a look at what fine pieces of art you can score from the demise of Heller Ehrman.

This year hasn’t been a fabulous one for Blank Rome. They’ve had to cut both salaries and headcount. The firm also pushed back start dates for first-year associates, until “at least” January 2010, and the 2009 summer program was a brief six weeks.

This latest news doesn’t improve matters. From the Legal Intelligencer, via Am Law Daily (and also a commenter):

Blank Rome has entered into a $20 million agreement with the trustee of a former client that is now in bankruptcy to settle a complaint that alleged breach of fiduciary duty, professional malpractice and breach of contract claims against the firm.

The settlement, reached in the Philadelphia Common Pleas Court case Miller v. Blank Rome, was approved by U.S. Bankruptcy Judge Mary F. Walrath for the District of Delaware on July 28. Walrath is overseeing the bankruptcy of American Business Financial Services, which is involved in a string of litigation in both state and federal court stemming from its bankruptcy and business dealings.

Blank Rome does not admit any liability or wrongdoing in agreeing to the settlement, according to the agreement.

Of course they don’t admit liability. Still, $20 million is a lot of dough. Who’s on the hook for that?

* Justice Clarence Thomas cut SCOTUS to go speak to a high school’s graduating class. [NBC Washington]

* The Second Circuit puts the brake on the Chrysler bankruptcy proceedings. [Washington Post]

* Nationwide Pay Raise Watch: New York judges get a vote ruling of confidence in their request for a salary increase. [New York Law Journal]

* Dan Slater wonders whether Morgan & Finnegan’s dissolution is proof that the end is nigh for IP boutique firms. [IP Law & Business]

* The mark of Rove in the DOJ? [True/Slant]

* Delivery woman brings a Miami-Dade prosecutor a pizza. Prosecutor greets her with a knuckle sandwich. [NBC Miami]

The big news story for today, as noted in Morning Docket, is the bankruptcy filing of General Motors. Developments on the GM front are being closely covered over at our sister site, Dealbreaker (which also welcomes a new writer today).

There are some legal angles to the GM story, of course. The bankruptcy will generate lots of work for several top firms, as noted by the WSJ Law Blog and Am Law Daily.

But you don’t need a law degree to play a major role in this drama. From the New York Times:

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism. But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry….

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

Maybe more than a little scary. But YLS grads students can do anything, right?

Find out how Brian Deese landed this gig, and take our reader poll asking what should be done with GM, after the jump.

* A dramatic closer look at Wolf Block’s collapse. [Philadelphia Magazine]

* The media buzz this week on Sotomayor: Her decision in the New Haven firefighters case could be a key issue during her confirmation hearings. [USA Today]

* Minnesota’s Supreme Court will hear arguments today in the Coleman—Franken election race. Yes, it is still going on. [Wall Street Journal]

* GM files for bankruptcy today. Wasn’t it always just a matter of time? [Associated Press]

* U.S. Bankruptcy Judge Arthur Gonzalez has approved Chrysler’s sale of most of its business to Fiat. [Bloomberg]

* A Georgia man is facing execution for murdering an off-duty cop in 1989, even though seven out of the nine witnesses have recanted their testimony. Should SCOTUS intervene? [New York Times]

* GM drove its Chevy to the bondholder levy but the levy was dry. Bankruptcy imminent. [Wall Street Journal]

* Is your support for same-sex marriage and opposition to Prop 8 strong enough to risk a citation for jaywalking? [CNN]

* … For more on yesterday’s California Supreme Court ruling letting Prop 8 and existing marriages stand, see our post on the topic. [Above The Law]

* Do people outside of New York care about the Brooke Astor trial? The New York media are going crazy over it, but we checked Twitter — our new gauge for public interest — and there’s not much #Astor trial tweeting there. Things did get more interesting for Biglaw ilk yesterday though, when McDermott, Will & Emery partner Henry “Terry” Christensen III took the stand. [AmLaw Daily]

* Almost everything you could want to know about the history and personal life of SCOTUS nominee Sonia Sotomayor. For example, during her time at boutique firm Pavia & Harcourt defending Fendi, she tracked down a suspicious merchandise shipment in Chinatown and hopped on a motorcycle to chase down suspected counterfeiters. There are also some things you might rather not know. For example, she likes to lunch on tuna fish and cottage cheese. [New York Times]

* Adam Liptak sticks to analysis of Sotomayor’s legal opinions in this piece. [New York Times]

* Republicans slam Obama for his “empathy” standard for his SCOTUS nominee, citing an earlier speech on the Senate floor emphasizing a different standard. [The Washington Post]

* Speaking of Obama, is he “the best lawyer to occupy the U.S. presidency since William Howard Taft”? [Foreign Policy]

* The Yankees held a moot court in a room off the clubhouse. Would you want to face a jury of Derek Jeter and Johnny Damon? [The New York Times]

* The Justice Department has arranged for the first Guantanamo inmate to be tried in a New York court. [The Washington Post]

* Shuttered Chrysler dealers may have a tough time fighting their closures in court, due to the freedom that bankruptcy laws give courts to tear up contracts. [The Wall Street Journal]

* Immigrants are being deported in the middle of their court cases. [The Los Angeles Times]

* President of San Francisco’s Federal Reserve says the economy is getting better. “For the first time in a while, there is some good news to savor.” If by good news, you mean that laid-off lawyers have taken to wearing track suits around the house “savoring” comfort food instead of 6-figure salaries, then yes, there is reason for optimism. [Bloomberg.com]

* Meanwhile, Chrysler’s bankruptcy judge Arthur Gonzalez paved the way for a fire sale of most of the company’s assets. [Reuters]

* A Miami juror, who was on the jury deliberating the case of 6 men accused of conspiring to destroy the Sears Tower in Chicago, was replaced for refusing to deliberate. Got to hand it to her for getting out of jury duty. [The New York Times]

* Souter says goodbye, telling the U.S. Court of Appeals that a jurist’s satisfaction is “not in the great moments, but in being part of the great stream.” [The Washington Post]

* Should there be more women in the “great stream” Souter described. Justice Ginsburg says the Court would benefit from another woman. [USA Today]

* Senator Chuck Schumer went to bat for Loretta Lynch, former U.S. attorney for the Eastern District of New York, who held the job under Clinton and who has just been re-appointed by Obama. [The New York Times]

* The bankruptcy judge has made several decisions to keep Chrysler afloat including allowing a $4.5 billion credit line from the U.S. and Canadian governments. [The Detroit Free Press]

* State attorneys general will meet with Craiglist to discuss the elimination of advertisements for “illegal sexual activities.” [The Associated Press]

* In the Court’s first public appearance since Souter announced his retirement—there were many announcements of decisions and upcoming cases—but no mention of the elephant in the room. One case that will be decided is whether it is cruel and unusual punishment to give minors life sentences for serious crimes like rape. [The Washington Post]

* A group of biker lawyers has gotten together to form a small Los Angeles firm that represents victims of motorcycle accidents. [The Los Angeles Times]

* The story of a Beijing lawyer who took on Communist officials in court is evidence of how little freedom Chinese citizens really have. [The Los Angeles Times]

* The Chrysler bankruptcy judge, Arthur Gonzalez, is a hotshot and has presided over Enron and Worldcom bankruptcies. [The Associated Press]

* What did Obama mean when he said he was looking for “empathy” in Souter’s replacement? [Politico]

* The rickety farm house (pictured here) where Souter grew up and to which he returns each summer is completely charming. [The Boston Globe]

* Former Bush fundraiser and ambassador to Austria, David Girard-diCarlo, joins Philadelphia firm Cozen O’Connor. [The Philadelphia Inquirer]

* The California Supreme Court upheld a lower court ruling that let a Catholic Lutheran school expel two 16-year-old girls for having a lesbian relationship. [The Los Angeles Times]

* Trying terrorism suspects is complicated, to say the least. [The New York Times]

* Federal Judge Susan Illston, who will be presiding over Barry Bonds steroids case is reputed to be very sharp. [The New York Times]

* During his inauguration, chief judge Jonathan Lippman of the state Court of Appeals in Albany lobbied for pay raises during his speech. [Newsday]

* Citigroup’s corporate directors cannot be held responsible for losses resulting from the sub-prime mortgage mess, a Delaware judge says. [The Associated Press]

* “The House delayed a vote on legislation to allow bankruptcy judges to modify the mortgages of troubled homeowners.” [The Washington Post]

* The Justice Department will try the accused al-Qaeda operative, who has been long held by the government as an “enemy combatant,” as a civilian. The decision could be a factor in the upcoming SCOTUS discussion on presidential powers. [Bloomberg.com]

* A Judge ruled that the billions of dollars Leona Helmsley left to charity do not have to be spent exclusively on dogs. [Courthouse News]

* Michael Jackson “beat it” without paying his legal bill. [The Daily Breeze]

* Former Merrill Lynch CEO John Thain testified for 2.5 hours yesterday in New York in Attorney General Andrew Cuomo’s office, but wouldn’t say which employees got some of the $3.6 billion bonus pie before the merger with B of A. How are we supposed to know which men to date when we get laid off? Kidding….[Bloomberg]

* More than 100 clients of a man who pretended to be an immigration lawyer got free advice from Lawyers at the New York City Bar Association. [The New York Times]

* SCOTUS had a big day yesterday, ruling on a Utah union case and a case involvingIndian reservations, and hearing arguments on environmental cleanups. Ruth Bader Ginsburg was the first to ask questions. [ABA Journal]

* In Houston, a Republican on the congressional judiciary has called for the impeachment of U.S. District Judge Samuel Kent, aka the groper we’ve been writing about, who is still hoping to get retirement funds from the state. [The Houston Chronicle]

* Show me the money. Lawyers, bankers, and accountants stand to make $1.2 billion in fees from GM’s bankruptcy. [Bloomberg.com]

* SCOTUS will look at the separation of church and state when they decide whether “a cross to honor fallen soldiers can stand in a national preserve in California.” [The Los Angeles Times]

* Lawyers say Madoff must have had help with his Ponzi scheme. [Bloomberg]

* Attorney General Eric Holder visited Guantanamo yesterday to see what is needed to close the prison. [The Associated Press]

* Meanwhile, a Pentagon official who inspected Guantanamo at Obama’s request is under fire from human rights activists for filing a report (which declares Gitmo humane) that is little more than good public relations for the administration. [The New York Times]

* What do you do when your boss gets indicted for securities fraud? You get another job. A team of seven bankruptcy lawyers left Dreier LLP for Epstein Becker Green. [EBG]

* A federal judge encouraged the Obama administration to decide whether to keep pursuing a case against 11 Vietnam War Veterans accused of trying to overthrow Laos’s communist government. [The Associated Press]

* Judge says: UBS must respond to the U.S. lawsuit seeking disclosure of 52,000 names of people who allegedly used Swiss accounts for tax evasion. [Bloomberg]

* The U.S. government may force GM and Chrysler into bankruptcy to ensure re-payment of the $17.4 billion bailout to taxpayers. [Bloomberg]

* A hearing today before the Ninth circuit in San Francisco will provide insight in to the administration’s views on extraordinary rendition—the secret transfer of a terror suspect from one state to another. [ABC]

* The Italian Senate will discuss a “Right-to-die” bill designed to keep an Italian woman on life-support. [The International Herald Tribune]

* When will the baseball steroid scandal ever end? Sportsfans are up in arms about reports that Alex Rodriguez used steroids in 2003. [Reuters]

* A new book “Claudette Colvin: Twice Toward Justice,” sheds light on a forgotten hero in the civil rights movement and the legal fight to de-segregate busses. [The Associated Press]

* Need a job? Attorney Michael D. Hausfeld, who once represented Holocaust victims against Swiss banks, started a law firm that focuses on protecting businesses against global cartels. [The Washington Post]

* Enjoy the inauguration. Even if work sucks—America is awesome. There is a lot of news concerning the inauguration, but one interesting point is that Defense Secretary Robert M. Gates is the “designated successor” to run the federal government in case of emergency and will not attend the inauguration. [The Washington Post]

* A federal judge granted Cheney discretion over which records of his actions as Vice President have to be preserved in the national archives. Good idea. Surely we can count on Dick Cheney not to destroy any documents that make him look bad. Especially since he has been so truthful and transparent in the past. [The Washington Post]

* Former public defender Randy Koshnick’s representation of cop-killer Ted Oswald could hurt him in his bid for a seat on Wisconsin’s Supreme Court. [The Chicago Tribune]

* Frequent ATL readers are probably sick of reading about Guantanamo. But the war crimes court at the prison convened yesterday, and proceedings were disrupted by the self-proclaimed mastermind of 9-11. [Reuters]

* The International Court of Justice ruled that the U.S. violated a previous order when Texas executed a Mexican national guilty of rape and murder. [The Los Angeles Times]

* The 213 families in China whose babies got sick from drinking tainted milk brought the case to Chinese Supreme Court. [The Associated Press]

* Chicago lawyer Anton Valukas is in charge of investigating Lehman Brother’s bankruptcy. [Bloomberg.com]

In this economic climate, bankruptcy partners are worth their weight in gold. Expect to see more lateral movement in the bankruptcy bar, as marquee names get courted by firms seeking greater presence in the area.

Here’s what could be the start of a trend: Bruce Zirinsky (pictured), co-chair of the financial restructuring department at Cadwalader, Wickersham & Taft, is moving from CWT to Greenberg Traurig. Joining him is fellow bankruptcy partner John Bae.

In response to inquiries from ATL, spokespersons at Cadwalader and Greenberg Traurig issued this joint statement:

We can confirm that Bruce Zirinsky and John Bae have tendered their resignation at Cadwalader, Wickersham & Taft and have accepted offers to join Greenberg Traurig shortly.

Congrats to Greenberg Traurig on their new hires. GT seems to be growing despite the downturn, as reflected in their most recent press releases.

As for Cadwalader, all’s fair in love and lateral moves. The firm is losing two bankruptcy partners, at a time when they’re in high demand. But recall that, back in March 2007, CWT raided another firm for Chapter 11 champs of its own: George Davis, Deryck Palmer, John Rapisardi and Andrew Troop, who left the storied bankruptcy group of Weil Gotshal for Cadwalader.

Reflections on what the Zirinsky and Bae defections mean for CWT, after the jump.

* Anti-government demonstrators in Thailand swarmed around the Parliament building Monday, delaying the new legislature’s first meeting. [International Herald Tribune]

* Bloggers beware! A Maryland court will decide whether authors who write critical comments on-line under pseudonyms will have to reveal their identity. (yikes!) [The Baltimore Sun]

* New York chief court judge Judith Kaye officially retires Wednesday. Now a highly celebrated Judge, Kaye was not an easy sell when Cuomo appointed her to the state court of appeals. [The New York Times]

* US Courts will stil see a steady flow of terrorism threat cases, even when Obama is president. [The Washington Times]

* In light of recent events in Gaza, the Iranian cabinet has decided file suit against Israeli officials in international courts. [Trend News Agency]

* Holiday sales were the worst in 40 years, so expect to see a ton of bankruptcies and take-overs in the near future. [Bloomberg]

* The White House has raised the prospect of “pushing the cars into a managed bankruptcy as a solution to save the companies from financial collapse.” [The International Herald Tribune]

* The Iraqi journalist who threw the shoe at President George W. Bush will go on trial for insulting a foreign leader, which could get him up to two years in prison. Another case may be brought against the people who beat him after the incident. [The Associated Press]

* “Deep Throat” W. Mark Felt Sr., the second highest official in the FBI during Watergate, and the famous anonymous source who led journalists Bob Woodward and Carl Bernstein through the “crimes and coverups” of Richard Nixon died yesterday at 95. [The Washington Post]

* The 9th Circuit ruled that the U.S. courts might not be the appropriate place for Papua New Guinea citizens to sue British mining company Rio Tinto for inciting a “savage” ten- year civil war. [Courthouse News Service]

* A California jury acquitted surgeon Dr. Hootan Roozokh, who was accused of trying to accelerate an organ donor’s death. [The Los Angeles Times]

* Remember DC Judge Roy Pearson’s pants suit? The D.C. Court of Appeals rejected it yesterday…no surprise there. [The Associated Press]

* First there was the recession, then there were the bankruptcy’s, followed by the lay-offs, and now here are the scandals. The DOJ charged four people in an insider trading scheme incolving a Lehman broker.[CNN]