The Baroness of Bankruptcy

One day when Jan Hayden was a child, her mother told her, “You really have to get your anger under control.”

Three months later, Hayden’s mom complimented her daughter on her newfound ability to stay calm. “How are you doing it?” she asked.

“When I get really mad I go into my room and bend coat hangers,” Hayden replied. “And then I unbend them.”

Hayden’s mother grinned. “So that’s why all the coat hangers are coming apart.”

Hayden uses the same technique today—just with less collateral damage. “I learned to, in my mind, bend a coat hanger,” Hayden, 55, says of how she manages frustration in her bankruptcy practice at New Orleans’ Heller, Draper, Hayden, Patrick & Horn. “If I get really angry I’ll just stop. … My client is perfectly capable of emoting on his own. My job is to use my brain to help him solve his problem.”

For nearly three decades, Hayden has handled some of the state’s most high-profile bankruptcies, repping debtors ranging from casinos and beer companies to airlines and nursing homes. Hayden is known as a savvy but approachable attorney “with a lot of experience in every kind of core bankruptcy matter you could think of,” says Lisa Futrell, a New Orleans bankruptcy lawyer with Jones Walker. She met Hayden in the early 1980s, when the two women faced off in a large oil and gas company case.

“She is never high-handed,” says Futrell. “Even now when she talks to a new lawyer or someone who is not a bankruptcy practitioner, she’s always even-handed and polite and she never—as my mama would say—is ‘ugly acting.’ She’s just a relaxed and nice person.

“That doesn’t mean she’s a cream puff. Make no mistake of that,” adds Futrell, who generally represents creditors. “Most of the time we’re adversaries. I’ve had people tell me we’ve done everything but mud wrestle. And still I would say we’re friends.”

When Hayden was about a year old, her family moved from Lawton, Okla., to New Orleans. She inherited a flair for quick-witted storytelling from her fun-loving mother. From her dad she got generosity. Once, when an employee at her father’s lumberyard was accused of murder, Hayden’s family members, believing the man to be innocent, put their homes up as collateral for the man’s bail bond. “My uncles and my daddy went to every hearing and took care of him,” she recalls. “[My dad] didn’t seem to ever worry if he was going to run out of what he had. He just was willing to share with other folks.”

While earning an undergraduate degree in political science from Louisiana State University, Hayden toyed with the idea of becoming a teacher or government worker. But prayer steered her toward law, she says. “I remember thinking, ‘Well, the reason God wants me to do this is because I’ve always had it so easy and law school is so hard.’ So then I finished 10th [in my class] and I went to church and I said, ‘Well, obviously that wasn’t what you had in mind.’”

A perfectionistic law student with a tendency to over-prepare, Hayden was often bored with a subject by test time. “I decided that when I was correcting the book, it was time to put it away.”

But it was her claim to fame as “the law clerk who won the dance contest” that piqued the interest of potential employers who interviewed her after she earned her J.D. from Louisiana State in 1979. While clerking for Judge Fred Blanche at the Louisiana Supreme Court, he talked his young protégée into partnering with him at a summertime brown-bag lunch concert and dance competition in front of the courts building. The pair performed the jitterbug, and won. “I never sat down [for an] interview,” she says, “[where] the first question wasn’t, ‘Were you the one that won the dance contest?’”

In 1981, a year after Hayden joined Heller Draper, founding partner Edward Heller—the man known then as “Mr. Debtor” and now often referred to as the dean of Louisiana’s bankruptcy bar—called her into his office and asked her to close the door. Hayden immediately thought, What did I screw up?

“I’d like you to do some bankruptcy law,” Heller announced.

“Well, sure,” Hayden said, relieved. “Is that all? Why did I have to close the door?”

“So you would feel free to say no if you didn’t want to do it,” Heller said.

“That’s when Edward became a mentor, and that was the best thing that ever happened to me,” Hayden says.

Bankruptcy law turned out to be a great fit for Hayden. “I love procedure,” she says. “I love figuring out how it’s supposed to work. The bankruptcy code, to me, was always like a big puzzle. I just enjoyed working through how it meshed together.”

The firm later merged with two of its competitors, with Hayden handling bankruptcy and reorganization proceedings for retailers, apartment complexes, gaming operations, the Louisiana World Exposition and, in her biggest and longest-running case so far, Babcock & Wilcox, an international manufacturing company that filed for bankruptcy after settling a bevy of asbestos claims. “What’s neat is you learn different law,” she says. “You have to learn about admiralty liens and torts. You learn about oil and gas liens. Then you go to apartment complexes and start to find out about city codes and, with retailers, you learn a lot about different businesses. So it’s never boring.”

In what she considers her most unusual case, Hayden helped an alligator farm reorganize its secured debt and pay off its unsecured creditors. Terrified of the scaly reptiles, she refused to visit the southeastern Louisiana company where alligators were hatched and raised before being released into the wild. Still, she says, “I used to laugh and tell the lender that if they didn’t settle with me, I was gonna deliver their collateral, all those alligators roaming around.”

Her favorite case, however, involved an older doctor and his wife who had filed for bankruptcy. Each month, the family would meet with Hayden and she’d advise them on how to proceed. The next month, they’d admit they hadn’t followed her instructions. “So finally one day I said, ‘Look, we are not gonna be flounders anymore, swimming around doing stuff. We’re gonna be trout. We’re gonna set a goal and we’re gonna go there.’ And we did a plan and reorganized their stuff and they went on to live, I think, a happy retirement. But for years they would write to me and sign it, ‘Your loving flounder.’”

The most difficult clients, she says, fall into two categories: the dishonest ones, and those who refuse to give up even when the odds are stacked against them. “One of the [most challenging] things is when the owner of the company is just really, really dedicated and wants to try to save the company and the jobs and you just don’t see it happening. It’s hard when you have to shut one down.”

Still, she says, her role is to help people keep their businesses intact. “You’re trying to make a silk purse out of a sow’s ear, I guess. I mean, it’s already a disaster or they wouldn’t be coming to see you. So it’s great when it works, and when it doesn’t work … then you do a decent burial on the case. Most of our cases are successes and we confirm a plan. But there’s many a time that somebody’s come just too late to be helped.”

In 2009 the Louisiana State Bar Association honored Hayden with its Pro Bono Publico Award for her efforts to mentor young lawyers and represent New Orleans workers who ran into debt problems after Hurricane Katrina. She also worked to help rebuild the community through her church, St. Paul’s Episcopal, and Second Harvest Food Bank. “My house was fine [during the storm],” she says. “I lived on the island in that area that didn’t flood and my job was all right and my family was alive and well. I began to realize just how fortunate I had been and that drove me afterwards to share that grace.”

A devoted mother to 13-year-old Andrew, Hayden is active in her son’s Boy Scout troop, helping the youth earn merit badges and performing other volunteer duties. Camping—well, that’s another story. “I hate it,” she says. One night when Andrew was 7 and a Cub Scout, she was lying next to him in his tent when he put his head on her shoulder and said sweetly, “Isn’t this great, Mom?”

“And I was like, ‘Oh, you’re right, sweetheart. It’s just great.’ I thought, ‘OK, this will be another time when I lied.’”

Hayden isn’t so accommodating when it comes to her flower gardening. One year, her Scottie dogs kept running to the door, noisy and agitated. “I was like, ‘What is the deal?’ There were rats eating my tomatoes. That was the last vegetable I grew. They don’t eat my sunflowers.”

Despite her mental coat-hanger-bending strategy, she admits, in the courtroom “I can get myself worked up because I care deeply about the result. … It’s important that I get it right because so much is riding on that. Sometimes that desire pushes me hard to be zealous in court. I remember one time a judge told me, ‘If you promise to be quiet, I promise to rule for you.’”

Nevertheless, in both her work and personal life, Hayden has mellowed. “Everybody gets different sticks,” she says. “So you could just bang each other over the head until everybody died, or you could assess how big the other guy’s stick is and then find a solution so you don’t kill each other.” 

Nancy Henderson is the author of Able! How One Company’s Extraordinary Workforce Changed the Way We Look at Disability Today (BenBella Books). She has written about Southern people and places for Parade, Smithsonian and The New York Times.