Bankruptcy, Biglaw

If the Big Three Fall, Which Law Firms Rise?

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Are we going to have a domestic auto manufacturing industry in 2009? Nobody knows. But just in case the government doesn’t bail out Detroit, law firms are jockeying to work on the bankruptcy.

AmLaw Daily reports that three firms are the early favorites to capture the bankruptcy work: Weil, Gotshal & Manges, Kirkland & Ellis, and Skadden.

Timothy Pohl, part of Skadden’s ruling class, sounds confident that his firm is in the running:

Pohl says Skadden has historically done work for former Chrylser owner Daimler, which sold 80 percent of Chrysler to private equity firm Cerberus Capital Management in 2007 for $7.4 billion. Skadden also does work for Ford, says Pohl, adding that the firm has yet to be contacted by either automaker.

“I’m not convinced that any [of the Big Three] are hiring advisers yet,” Pohl says. “But between us, Kirkland, and Weil, I’d say that the three of us have the largest [bankruptcy and restructuring] groups with a big falloff after that.”

Obviously both Skadden and Kirkland have the chops to handle the work, but isn’t the real question “Why not Weil?”

It’s uncertain whether a potential Big Three bankruptcy might present a similar problem for Weil–and how the firm would manage to juggle its Lehman, Lenox, and other client obligations in the event of such a resource-draining retention. That’s especially true given that it’s unclear whether a potential Big Three filing would proceed on a liquidation track (a la Lehman) or as an infinitely more complicated corporate restructuring.

At some point, Weil has to run out of bankruptcy lawyers. Right?

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On Kirkland, after the jump.


Shouldn’t a rust belt bankruptcy be handled by a rust belt law firm? That’s part of the thinking behind Kirkland & Ellis:

In the past year, Kirkland’s bankruptcy and restructuring practice has even managed to outpace Weil’s, recovering from the departure of former practice head James “Jamie” Sprayregen to Goldman Sachs in 2006 by landing former Gibson, Dunn & Crutcher partner Richard “Rick” Cieri to head the group. Ford is a longtime Kirkland client–the firm was named The American Lawyer’s Litigation Department of the Year in 2008 in part for work done for Ford–and the company has turned to the firm before to help it advocate for auto industry interests.

Kirkland and a Ford bankruptcy would make a lot of sense. One would imagine Kirkland would be very “motivated” to make a Chapter 11 proceeding with Ford work, just to preserve a restructured Ford as an ongoing client.

Or maybe the Big Three won’t need to go into bankruptcy at all. I hear current specs on the Chevy Volt already gets more horsepower than a Segway Personal Transporter.

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Who Headlines a Big Three Bankruptcy? [AmLaw Daily]

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