Monday, June 1, 2009

Law Firms and Advisors will Make Millions from GM BK & Gov't Creates Special Task Force @ Taxpayer Expense

One company’s downfall is another company’s opportunity, particularly if the other company is a law firm.

General Motors’ bankruptcy filing today will divert millions of dollars to bankruptcy lawyers at two major New York firms - Weil Gotshal and Dewey & LeBoeuf.

Harvey R. Miller of Weil Gotshal, the lead attorney in the Lehman Brothers bankruptcy, is also lead attorney in GM’s Chapter 11 proceedings.

Martin Bienenstock, a partner of Dewey & LeBoeuf who used to work with Miller at Weil Gotshal, is also advising GM. Bienenstock was lead attorney for the Enron and the Delphi bankruptcies.

Another prominent firm, Cravath, Swaine, is representing the GM board during the proceedings.

The UAW, meanwhile, has brought in Lazard Ltd. and Cleary Gottlieb.

The White House, steering the bankruptcy through the Presidential Task Force on the Auto Industry, has also hired an expert team. Led by former investment banker Steven Rattner, the group is also being counseled by Cadwalader, Wickersham and the Boston Consulting Group.

Legal experts predict long, complicated proceedings for GM, generating millions in fees. Daniel Gross of Newsweek notes that the Enron bankruptcy carried a tab of $750 million for attorneys and other advisers.

Weil Gotshal has already billed $55 million in fees in the Lehman bankruptcy. Harvey Miller’s rate in that case has been $950 per hour.


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