Dealmaker Limelight: John Sobolewski

Photo by Nick Coleman

It’s fair to say John Sobolewski chose his profession based on the advice of a computer, though he did so years before the era of ChatGPT and generative AI.

The on-point counsel that would eventually lead him to become a partner at the legendary New York firm Wachtell, Lipton, Rosen & Katz and to a career shaped by landmark deals, including T-Mobile’s merger with Sprint came, instead, from a rudimentary program that suggested potential careers to Sobolewski and his seventh-grade classmates in computer science.

All the students had to do was type in subjects that they found interesting, and the software program would identify related jobs, says Sobolewski, who grew up in Connecticut.

“Whenever anybody asked me what I was going to be after that, I said, ‘I’m going to be a corporate lawyer in New York.’” The dream first became reality when, after attending Harvard Law, he joined Cravath as an associate in 2008. It was the same year history would later recall as the apex of a global financial crisis that included the failure of investment bank Lehman Brothers, the loss of trillions in stock market value, widespread layoffs and massive government bailouts meant to avert economic collapse.

Sobolewski weathered the storm, working his way through Cravath’s corporate rotations program.

Then in 2012, he jumped at an opportunity to join the restructuring and finance group at Wachtell Lipton.

While Wachtell’s restructuring practice, founded by Len Rosen, was already an institution, the firm was still in the process of building out its finance expertise.

“It was an opportunity to be in a growth practice at the marquee corporate law firm, and that was an exciting space,” he says.

Lawdragon: Amazing timing. Tell me about some of the deals that have shaped your career since then.

John Sobolewski: T-Mobile was a formative experience for me. I began working with that client through Deutsche Telekom, its controlling owner, in 2012 in connection with T-Mobile’s merger with MetroPCS. I was still an associate at the time. That work led to me representing Deutsche Telekom and T-Mobile in financing matters in connection with T-Mobile’s merger with Sprint, which was signed in 2018, my first year as a partner.

It was a huge matter – $38B of financing commitments – and it epitomized what we can do as a firm in the acquisition financing world when we represent major corporate borrowers. We negotiated best-in-class terms, and integrated a really complicated financing structure into an equally complex M&A deal. The transaction included, for example, a rare ratings condition, as our deal was premised on T-Mobile being able to issue secured bonds that would qualify for investment grade ratings (and in turn enable access to the deep investment grade market).

LD: And you also worked on financing for Gap, the clothing retailer, during the Covid-19 pandemic, didn’t you?

JS: I did. I had not worked closely with Gap until the Covid crisis, but with the closing of most of their stores due to lockdowns, Gap needed a cash war chest to withstand the uncertainty. That was truly an “in the trenches” experience. I was working day in and day out with an incredible team at Gap on a transaction where failure was not an option.

When you're a mid-level associate and a partner calls you and says, “I’ve got a matter,” you jump on it.

LD: And it was happening amid social conditions most of us hadn’t seen in our lifetimes. What were the results?

JS: Those social conditions were definitely wild.... I probably don’t need to remind anyone, but none of us had really used Zoom two months earlier, and then all of a sudden we were on it with one another 24/7, working collectively on a really tricky matter. And as to results, Gap was able to get the war chest it needed: We helped them structure new financings around their core assets, an ABL supported by typical retail assets including inventory and accounts receivable, and bonds backstopped by Gap’s unique real estate portfolio. Those new financings added up to more than $4B altogether, where previously the company had less than $2B of simple, investment-grade style debt.

LD: Those are the kinds of experiences that can build lasting relationships.

JS: Definitely. You really get the opportunity to know the team, which makes the work that much more satisfying. I formed relationships that I really value with folks on the finance and legal teams at Gap, who are sensational, as well as with folks who have taken on senior roles at other great companies since then. 

LD: Very cool. You’ve really worked on a wide variety of deal types. Can you describe your pathway to this point?

JS: When you're a mid-level associate and a partner calls you and says, “I’ve got a matter,” you jump on it. I don't know if it was happenstance or design, but I ended up getting calls more about matters involving leveraged finance, both sponsor-driven matters and leveraged corporate borrowers. Some of them were extremely complex and involved heavy negotiation – not sharp elbows, but not gentle either. The nature of the practice swept me up, and I think it was lucky for me, because it’s a field that's just continued to get more interesting. And today, you've got “liability management” transactions that are super complicated – and often litigated – and you get a lot of opportunities to add real world value as a lawyer when you’re doing that kind of matter. So it's just been a fun place to be.

LD: You mentioned liability management, which is something we hear about a lot these days. How would you say the leveraged finance world has evolved since you started practicing?

SB: When I started doing finance, we were in the early days of the sponsor-driven debt adaptations where sponsors picked their form rather than using the bank’s form. They would really push for maximum flexibility on future covenants, etc., because they had an earlier understanding of the value of that flexibility than some other players in the market. That was the new wave. At Wachtell we took the position that there was no reason that flexibility should be exclusive to our sponsor clients. We fight hard for our sponsor clients, but we fight equally hard for that flexibility, those best-in-class terms, for our corporate borrowers.

What’s happened since then is that the documents, the credit agreements and bond indentures, have gotten more complex and more flexible. Meanwhile, bank loan investors – which used to just be a small group of literal banks – now come in a lot of varied shapes and sizes, and those investors focus on their own individual interests and incentives. The result is a new dynamic in lender/borrower relations – an environment where, when a borrower faces business or market challenges, lenders compete to be the most thoughtful and creative, and those are the folks that the borrowers transact with.

I was working day in and day out with an incredible team at Gap on a transaction where failure was not an option.

For me, it's been fun to represent, over the past few years, some of the most creative lenders as well as borrowers that are in need of flexibility in tough times, for example, as we did with Travelport, a travel business significantly impacted by Covid. The company was having an intense dispute with its lenders over a “drop-down” financing, and we had two main tasks: first, vigorously counter the lenders’ default arguments, and second, work on a settlement transaction pursuant to which the lenders would provide the financing Travelport needed and the litigation relating to the drop-down would be resolved. Our hard work on the former facilitated our success in achieving the latter.

LD: Getting a successful result in a complex situation like that must give you a tremendous sense of accomplishment.

JS: It’s very satisfying. These are fluid situations and they require the best of you as a lawyer on multiple fronts: covenant analysis, consideration of how the matter might play out in court, and a really strong sense of lender dynamics. You're negotiating to get the best possible outcome for your client, but you're also trying to reach something, ultimately, where the dust will settle and there will be a final resolution, not a dispute stretching into perpetuity.

LD: That evolution has really made the role of the lawyer and the dealmaker so much more interesting and competitive. What do you like most about being a dealmaker at Wachtell? How does it compare with the dream of that kid who said, “I’m going to be a New York corporate lawyer?”

JS: I guess I got really lucky I took that quiz. It's turned out great. Wachtell, specifically, is an amazing place in the sense that the culture was built here by the founders, who are still leading the firm on an everyday basis. If you want to live and breathe the work that we do, Wachtell Lipton can’t be beat. From our first-year associates to our senior partners, everybody's all in.

I'll give you a specific example. The former head of our group, a true luminary of the restructuring world, retired about five years ago. He is living in Colorado skiing 100-something days a year, as he absolutely should be doing, living the life. But when we had a very intricate issue come up a few months ago on a liability management transaction and my colleagues and I had exhausted each other, we said, “All right, let’s call our old colleague in Colorado, he’s the only one who can break this tie.” So we called him and he was immediately locked in, and he ultimately was the deciding voice in that issue. You would have thought that we walked into his office, that he was still in the building.

That ethos is what I love about this place. Everybody, even when they've moved on to the skiing lifestyle, lives for the complexity and the problem-solving and the fun of doing what we do.