Las Vegas has long been a place of interest for university students studying urban planning, water rights or the psychology of gambling.
But lately, the area has become a fertile ground for another type of academic study — bankruptcy law.
Nancy Rapoport, a law professor at the Boyd School of Law at the University of Nevada, Las Vegas, said bankruptcy filings in the news are giving her students concrete examples of how bankruptcy law works.
“You want law students to actually put these things into a context that they can understand while they’re still in law school,” said Rapoport, who started teaching bankruptcy law at Ohio State University in 1991. “Although I’m really sad for our economy, I am pleased this is not just some abstract concept to them.”
Bankruptcy filings in Nevada jumped 69 percent last year, to 18,389 from 10,874 in 2007, according to the U.S. Bankruptcy Court of Nevada’s Web site. The national average increase was 31 percent.
The pace hasn’t slowed in 2009. Filings through February increased 52.2 percent to 3,270 putting the state on pace to deal with more than 20,000 bankruptcies this year.
Third-year law student Joshua Lucherini said issues such as the housing crisis and consumer bankruptcies relate directly to what is being discussed in his class.
“It seems like Las Vegas, in the past couple of years, has been on top as far as our economy, growing the fastest,” said Lucherini, who taught a community service bankruptcy class last semester. “We had excellent job growth. Now it’s like the law of physics almost. Every action has an opposite and equal reaction. Right now we’re at the very bottom.”
Although the majority of the local filings have been by individuals looking to start over by filing for Chapter 7 bankruptcy, a few high-profile local companies have filed, or are expected to file, Chapter 11 bankruptcy cases this year in Nevada or Delaware.
Developer Jim Rhodes filed for Chapter 11 bankruptcy protection in March, as did Herbst Gaming. Gaming companies Station Casinos, Black Gaming, Riviera Holdings Corp. and Hooters Hotel could all file for bankruptcy in Nevada this year.
The local cases give Rapoport’s class real examples to examine.
“One of the challenges with law school is that a lot of times you get a whole lot of theory but you don’t get to see how it plays out,” second-year law student Elena Roberts said. “Now, in terms of seeing everything and what’s going on, particularly with professor Rapoport, because she does bring in those practical examples, you can see it play out in the news.”
Rapoport said experience makes some concepts, such as family law, easier for students to understand. Students are likely to know someone who is divorced or has fought for child custody.
But today, she said, it seems everyone knows someone who’s dealing with heavy debts or a home foreclosure.
“It makes it more immediate for them when it’s about them,” said Rapoport, who also travels frequently to discuss legal ethics and corporate governance. “People prefer to learn things when it is about them.”
Rapoport’s students could be in a good position to find employment after graduation with so many large bankruptcies apparently in the pipeline, she said.
“There are so many cases, so many megacases, that (law firms) are going to need people who can hit the ground running,” Rapoport said. “I hope the class will help our students with that.”
Lucherini said he hopes to do some consumer bankruptcies for his father’s law firm here after graduation.
“Its just an interesting course because bankruptcy has become an area of law that is prominent in the news lately,” he said. “We have corporations in the community like MGM and the Riviera that seemed, two years ago, like they were stable. Now they’re talking about filing bankruptcy.”
Roberts, whose husband is in the military, said a strong understanding of bankruptcy law will make her more marketable should her husband get transferred.
With the recession going on, bankruptcy is rising in national prominence because it is becoming a more viable option for small businesses faced with the credit freeze, Roberts said.
“And there are a lot of families living close to the edge who got sucked in with the mortgage crisis,” Roberts said. “What I am trying to do with my law school experience is maximize my ability to find a job.”
Rapoport is entering her third decade dealing with bankruptcy courts, first as a lawyer and then as a professor. She started in securities law soon after graduating from Stanford Law School in 1985. In 1988, she began focusing on bankruptcy law for its creativity.
“In Chapter 11, you can try a lot of things to get a company reorganized,” she said. “There are some code sections that limit you, but the only other limits are your imagination. I’ve always liked problem solving. It’s a real good area for me.”
Rapoport switched to academia in 1991, rising to associate dean for student affairs and professor of law in 1998 at the Ohio State University College of Law. She has also served as dean of the University of Nebraska College of Law (1998-2000). She became dean at the University of Houston Law Center in 2000, just more than a year before Enron Corp. imploded in the southeast Texas city.
Then, she arrived in Las Vegas in fall 2007, just before the first cracks in the slowing economy started to show.
As the semester winds down, Rapoport said the students are starting to make breakthroughs on their understanding of the bankruptcy code.
“The problem with teaching bankruptcy is you teach all these segments and it takes until the end for it to pull together,” she said. “Now they’re asking questions that makes me think they are pulling it together.
“I’m really proud of our students,” she added. “They’re smart and they work their tails off. They’re gonna make good lawyers.”
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.