NEW YORK -- The fate of R.H. Macy & Co. could very well be in the hands of one man: Chief Bankruptcy Judge Burton R. Lifland.
Judge Lifland is presiding in Macy's Chapter 11 case, and it's up to him either to guide the proceedings to a successful conclusion -- leaving Macy's management in place -- or to entertain outside offers, such as the still-vague plans of Federated Department Stores to take over Macy's.
Who is Judge Lifland and how is he expected to rule in the Macy's case?
Some see Lifland as a fair-minded jurist who tries to satisfy debtor and creditor alike. His supporters say his balanced style has helped upgrade the quality of bankruptcy proceedings.
Others see him as a man who runs a "debtor's paradise," sometimes allowing bankrupt companies to continue to lose money for long periods of time without the prospect for viable reorganization. He has the reputation -- some say ill deserved -- of being a judge who will bend over backwards to help the debtor company and, in the process, trample over the rights of creditors.
If this proves true in the Macy's case, chances are good he will keep Macy's current management in place, give management all the time it needs to come up with a plan and, in turn, block outsiders such as Federated from taking over the company.
But attorneys who appear before him day after day generally discount the "debtor's friend" talk.
One prominent bankruptcy attorney, who requested anonymity, said that in the end, Judge Lifland will give the creditors what they want.
"He is not debtor-oriented. That's a myth. He has an understanding of the Chapter 11 process that he learned in his years of private practice. He has a deep knowledge of the philosophy of bankruptcy. He can be impatient with people who come before him and are not prepared or who pose idiotic arguments.
"Over the years, he's had some of the biggest and toughest cases in the district, and he sometimes has shown the stress of his heavy case load. He had Johns Manville, a hopelessly complicated case with thousands of asbestos victims to deal with. He had LTV, which was in bankruptcy proceedings for seven years, largely because of a very sticky pension fund situation.
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