Berg was ultimately hauled off for an
18-year prison term. In the meantime, the
daunting task of cleaning up his insolvent
financial house was left to the bankruptcy
court—and especially to one Diana Carey, a
former librarian and amateur harpsichordist
who also happens to be among the region’s
most respected bankruptcy lawyers.
Carey found herself serving as de facto
CEO of Berg’s collapsed finances. She
oversaw the sale of the mansions, yachts
and jets. She managed his charter bus
companies and eventually negotiated
their sales. The objective: at least partially
compensate his many creditors and
Berg’s may be her best-known case, but
it wasn’t a typical one. Most bankruptcy
cases do not have villains, she says. They
involve honest individuals or companies
that stumble into dire financial straits and
need legal help to get back on their feet.
“Bankruptcy is a very stressful thing for
people to go through,” Carey says. “The law
exists to help them reorganize their finances
and get out of their misery. That means I
spend a lot of time serving as a counselor,
allowing them to vent, and advising them
how to handle the experience.”
Small in stature with an easy manner,
Carey has worked over the past 30 years on
an astounding 800 matters, including about
400 bankruptcy cases—most of them under
Chapter 11, which protects companies from
creditors while they reorganize their debts.
“Diana is the grand dame of bankruptcy
court,” says Virginia Burdette, a Seattle
bankruptcy attorney who works frequently
with Carey. “She’s been a real trailblazer.”
Karen Overstreet, a recently retired federal
bankruptcy judge who presided over many of
Carey’s cases, adds, “In addition to being smart,
she’s a personal, down-to-earth person.”
Burdette recalls one time when Carey was
sitting in court, waiting for her case to be
called. The judge interrupted proceedings
to question a family standing at the back of
the courtroom with a baby. The unfortunate
family was there because they were behind on
their rent and the landlord was trying to evict
them—just days before Christmas. Dismayed,
Carey stood up and volunteered her services to
the family. A day later, she had collected some
$2,500 in contributions from fellow lawyers
and negotiated an extension with the landlord.
“People would call me and say, ‘I didn’t
have the nerve to volunteer. Thank you.
Here’s $500,’” she says.
The family’s home was saved.
“Not all firms were enamored of hiring a
woman in her 40s,” Carey recalls. “But KTC was
one of the very first to have a woman partner—
Muriel Maurer—and I liked that about them.”
From the outset, Carey’s portfolio included
bankruptcy law. “Our firm was general
counsel to Peoples Bank, and there were
numerous matters that included loan workouts
or bankruptcy issues,” she recalls. “I had
excellent mentoring in the basics of a business
practice, such as drafting bylaws and articles
of incorporation, but most importantly, how to
counsel and work with clients.”
Two years later, she was asked to take over
the bankruptcy group at KTC. “Who is in the
group?” she asked. “You are,” she was told.
Of Carey’s hundreds of bankruptcy cases,
a few stand out in her mind.
In 2010, QL2 Software, a Seattle company
that helped airlines and other firms come
up with competitive pricing and product
data, filed for Chapter 11 protection. “They
simply ran out of funds and needed time
for recapitalization,” Carey says. Instead of
liquidating the troubled company, she put
together a plan to reorganize it, then found a
buyer. “The plan resulted in payment in full
to creditors and a return to shareholders—a
rarity in the bankruptcy world.”
CAREY’S JOURNEY TO SUCCESS followed
a long and unconventional career path. She
had an itinerant childhood, moving with her
parents from Michigan to Virginia to Montana
to North Dakota, before her father’s job with
Boeing led them to Seattle.
The beginning of her career was mobile,
too. She started college at Whitman in
Walla Walla, then moved to the University
of Washington to pursue a teaching
certificate. When it came time for student
teaching, she reached a realization. “That
was a bad fit,” she says with a chuckle.
On advice from a career counselor, she
shifted to library science, then worked four
years at the Seattle Public Library. Then she
moved to Boeing’s library, where she was
promoted to head of graphics. In the early
’80s, while on leave from Boeing, Carey
found herself back with a career counselor.
“You like research,” the counselor noted.
“You could go to law school.”
Lawyer friends warned that her age and
gender would work against her. But she
applied to the UW School of Law anyway.
Three years later, at age 42, she went to
work at historic downtown Seattle firm Karr
Tuttle Campbell, where she was introduced
to business and bankruptcy law.
about age and
the University of
of Law at age 42.