Star dealmakers remaking the rules of corporate debt

David Nemecek and Scott Greenberg spent countless hours across the table from each other this year, battling over the fine print buried deep in junk-rated companies' debt documents.

Kirkland & Ellis's Nemecek was representing companies in distress. Greenberg, from rival law firm Gibson Dunn & Crutcher, was on the other side, banding together investors owed billions of dollars to form so-called cooperation groups and fighting attempts to short-change them in a turnaround.

The two, both 47, are at the forefront of an elite group of white-shoe lawyers and Wall Street advisers who are reshaping a major corner of finance by changing up the playbook for companies struggling with crushing debt.

These debt workouts are part of the world of liability management, a small, aggressive and thus far male-dominated corner of corporate finance with big implications for both private equity firms and debt investors. The shift has been hastened by financial tactics with names like uptiering, drop-downing and double-dipping that shuffle assets away from the reach of existing creditors when a company runs into trouble.

The line of business is certainly lucrative. Boutique investment banks PJT Partners, Evercore and Lazard each cited such workouts as a driver of revenue this year. Top partners at firms like Kirkland and Gibson Dunn are known to bill more than $2,000 per hour, according to bankruptcy disclosures, though their rates for out-of-court workouts are not public.

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