Chapter and verse: Fiduciary roles expose attorney to an array of legal challenges

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By Sheila Pursglove
Legal News

Gene Kohut considered his BBA in finance from Western Michigan University a good starting point for a career in business law.

How right he was.

Kohut, an attorney and managing director with the consulting firm Conway MacKenzie in Birmingham, realized early on that his interests were in serving as a fiduciary for distressed situations.

“It happened by accident,” he says. “My interest began 20 years ago, when I represented a bankruptcy trustee. I found the work compelling enough to pursue the opportunity to become a trustee with the Department of Justice.”

During his years as a trustee, Kohut became increasingly interested in the distressed side of businesses—and from there, began serving in other fiduciary roles such as Court Appointed Receiver, Interim Business Manager, Chief Restructuring Officer, Chapter 11 Trustee, Liquidating Trustee in post-confirmation Chapter 11 situations, and also as a panel receiver for the Security and Exchange Commission’s Collection Unit.

“My role as a fiduciary has given me exposure to a vast array of industries as I oversee the wind down of company operations,” he says. “To me, it’s exciting work as each day provides a new experience. One never knows what industry or matter will be coming across my desk.”

Conway MacKenzie is expanding its fiduciary practice nationally, he adds.

“We’ve been exposed to many more significant cases, and that, of course, brings more significant problems and issues—it’s both satisfying and challenging at the same time.”

Kohut, who has liquidated numerous assets and managed business operations in more than 15,000 Chapter 7 cases, notes that Michigan’s new receivership laws clarify in more detail the responsibilities, duties and powers the receiver has, as well as sets out a more consistent process by which receivers are nominated and appointed.

“Prior to the changes enacted in February 2018, there was really no uniformity or guidelines by which a party seeking the appointment of a receiver or for that matter, the court had in order to decide whether somebody was qualified,” he explains.

“This is important when you take into account the following circumstances a fiduciary must manage during a liquidation for a company that ran out of money, where employees are going to be let go and there is no money to pay them, customers are calling and showing up to reclaim their products, the IRS is coming to lock the doors and seize assets, and the pension is underfunded. It takes years of experience to effectively administer the proper decisions and guidance.”   

The author of “Banking on Liability: Claims Against Ponzi Scheme Professionals” and “The Law Neither Persecutes Nor Pardons Every Professional Who Worked With The Ponzi Debtor” – American Bar Association – Commercial and Business Litigation Section (November 21, 2013), Kohut finds Ponzi schemes are very interesting cases. “You’re tasked with basically finding what happened to the money which can be exciting if you discover it,” he says. “There are times you have to utilize alternative methods to recoup the money in order to try to pay back investors. It can also be very tricky when trying to avoid a parallel government investigation.”   

Following a family member into the legal field, Kohut earned his J.D. from Detroit Mercy School of Law—where he later taught bankruptcy law as a member of the adjunct faculty.   

“I really enjoyed working with the students and the top-notch staff,” he says.

“I believe providing insight into the specialty of working with distressed situations provides students an important aspect of how the law functions at the crossroads of private and public legal matters.”

He also has been a frequent lecturer for the American Bankruptcy Institute, National Business Institute, Federal Bar Association, and the National Association of Bankruptcy Trustees.

Away from the office, the Detroit native enjoys golf, hockey, fishing and guns. His wife is an optometrist and Crossfit trainer. The couple’s 19-year-old daughter is a sophomore at Appalachian State University, while two sons followed dad into the financial world; the 23-year-old is a CPA in Chicago with Price Waterhouse Coopers; the 21-year-old is a senior at University of Nebraska majoring in finance.
 

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